Regular employees who work at least 30 hours per week, for at least 10 months of the year, are eligible to participate in Biola University’s cafeteria plan.
The cafeteria plan provides "benefit dollars" to eligible employees, enabling them to "shop" among an assortment of insurance benefits to customize insurance coverage, which better fits their individual needs. Each year, Biola determines the amount of benefit dollars made available to employees. An employee may opt to receive any unspent credit dollars as taxable cash added to regular paychecks. For employees who were hired or became eligible for benefits on or after October 1, 2002, the maximum amount that may be taken as taxable cash is $100 per month.
Section 125 of the federal tax code enables employees to "pre-tax" (pay before federal and state income taxes and social security taxes are assessed on wages) any premiums they must pay for insurance coverage such as health, dental, or vision insurance; accident insurance; sickness insurance; cancer insurance; and intensive care insurance.
Employees also may set up a medical care reimbursement account which authorizes a payroll reduction arrangement to pre-tax out-of-pocket medical, dental, and vision care expenses; insurance deductibles; co-insurance or co-payments; and any treatment not covered by insurance such as eyewear and prescriptions.
Expenses for childcare may be paid in a way that is similar to the medical care expenses. A dependent care reimbursement account can be set up through payroll reduction, as with the medical care reimbursement accounts.
Depending on an employee's tax bracket, the allowable Section 125 payroll reductions for insurance premiums, medical expenses that are not reimbursed, and dependent care expenses can save employees approximately 25% to 45% of the cost of these services.
Benefits begin on the first day of the month following employment or, if employment begins on the first day of the month, coverage begins immediately.