Section 125 Cafeteria Plans-Anyone doing them through Vantage?

I have worked for companies that have the Plan and have setup the plan
within other companies. The biggest problems I have seen is participation,
particularly in the manufacturing environment. It takes 2-4 years before
you will get good company participation. The first year you explain the
plan, but most people get concerned about the fact that they will lose
unused money. The only consider prescriptions, medical co-pay, and maybe
glasses as a medical expense. Unless they are regular medication they donÂ’t
think they can predict their usage. They never consider travel to and from
the doctorÂ’s office or pharmacy. Products that are not usually covered by
medical insurance and other out of pocket expenses. If they have children
in daycare they are pretty comfortable with expense, but do not consider
summer day camp, when the child does not stay overnight.

If the individuals that participate the first year have a good experience
and talk about it, the next year a few more will join. Of course if the
individuals having a good experience are in the office and donÂ’t interact
with individuals in the plant, etc., they never hear about this either.
With any luck each year a few more will sign up until you have good
participation. Additionally, with new hires if you do not spend time
thoroughly explaining the Plan and they did not have it before they wonÂ’t
sign up either.

The 125 Cafeteria Plan is one of the best benefits available, because it
allows individuals to withhold from their check for expenses that they could
not claim on the taxes. In addition, last year they added some public
transportation and parking expenses. It is a shame that employers implement
the Plan and then donÂ’t spend enough time helping their employees how to use
it to their benefit. If your benefits administrator (or whomever handles
that in your company) could identify a few people that could use the
benefit, but donÂ’t seem to be using it and sit down with them and help them
work through how to use it to their best advantage this would go a long way
toward getting company acceptance. The other problem is that in many cases
the decision-maker in the family doesnÂ’t usually work for the company and
does not receive the information they need to use this benefit.

Sorry to be so long winded, but as you can see this is something I feel
strongly about.

-----Original Message-----
From: Jim O'Donnell [mailto:jodonnell@...]
Sent: Monday, August 27, 2001 07:00 AM
To: 'vantage@yahoogroups.com'
Subject: RE: [Vantage] Section 125 Cafeteria Plans-Anyone doing them through
Vantage?

Unused money goes back to the Plan. It can then be used to pay Plan expenses
but does not go back to the Company for discretionary use.

Jim O'Donnell
Camcraft, Inc.


-----Original Message-----

We are stressing very thoroughly to employees to only put in the money that
they know they will use.
However, it is my understanding that unused money goes to the company, not
the government. Time for me to do additional research.

Deb @ Reeder & Kline Machine Co.






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[Non-text portions of this message have been removed]
Thanks for the info. The decision was made to start by administering the
125 plan ourselves, so until it is documented how much we trouble (or ill
will) it is generating, we are going to be doing the record keeping
ourselves. So, the sending of information to the provider may be one of the
reasons that Epicor doesn't pursue updating the Payroll module to accomodate
Sec 125 plans.

Please explain your procedures on W-2's if you process payroll in house.

-----Original Message-----
From: Alex Neutgens [mailto:alex.neutgens@...]
Sent: Wednesday, August 22, 2001 4:57 PM
To: 'vantage@yahoogroups.com'
Subject: RE: [Vantage] Section 125 Cafeteria Plans-Anyone doing them
through Vantage?


Use it as a non-taxable deduction (like medical) in Vantage. Dump it into
a file and send it to a provider. I would never recommend doing a
cafeteria plan yourself. Way too much paperwork. Our provider charged $4
a month per participating employee + $20 a year per participating employee.
They provide direct deposit of the funds (or a check) for one-time and
recurring expenses. They also send quarterly statments to all
participants. The provider deducts the amount in the file we send from our
checking account and we offset that in a clearing account that mirrors the
account of the employee deduction .All we have to do is a yearly
informational session. The employee sends in the application and
reimbursement requests. It works very well with very few questions or
complaints. The cost of the plan is more than offset by the employers
Social Security/Medicare tax savings. Call if you need more information.

Alex Neutgens
Controller
Circuit Check, Inc.
Phone 763-694-4110
Fax 763-694-4151



[Non-text portions of this message have been removed]
Karen, thank you very much for taking the time to respond to my question.
We are also on Version 4.
Since we are jumping in to the whole program at one time, I appreciate
knowing how you are & will be addressing these payroll issues.

Sure would like Vantage to do more to help. Excel is great, but keeping
everything within Vantage is better. This is the first payroll issue that
Vantage hasn't handled for us. Support said they didn't know how others did
it. Hence the glory of Yahoo groups!!!!

We are stressing very thoroughly to employees to only put in the money that
they know they will use.
However, it is my understanding that unused money goes to the company, not
the government. Time for me to do additional research.

Deb @ Reeder & Kline Machine Co.



Karen wrote:

We are currently using Vantage 4.0. We have a Sec 125 Cafeteria Plan but so
far, we only put the medical ins. deductions through the plan. Here is how
I will set it up when we go to out of pocket medical and daycare expenses:

Set up 2 liability accounts: Sec 125 Medical and Sec 125 Daycare
Set up 2 new deductions: Sec 125 Medical and Sec 125 Daycare
Sec 125 Medical and Daycare are not subject to Federal Withholding, Soc Sec,
Medicare, or FUTA. We are in the state of Washington and these benefits are
subject to State Unemployment Tax so check your state guidelines.
For the Daycare deduction, in the Special Type field, choose Pre-401k
Section 125
It is my understanding that the Medical deductions do not have to be
reported on form W-2 but can be in box 14, however Vantage doesn't seem to
allow you to elect any deduction to go to this box.

Keep separate spreadsheets on each employee for Medical and Daycare
activity. The balance of all medical at month end should agree with the
liability account. Same for daycare.

Remind employees that any contributions not used by the deadline for
submitting claims are lost to the government.

Hope this helps.

Karen Brodniak
Accounting Manager
karen.brodniak@...

-----Original Message-----
From: Wilmoth, Deb [mailto:Deb@...]
Sent: Wednesday, August 22, 2001 2:01 PM
To: vantage@yahoogroups.com
Subject: [Vantage] Section 125 Cafeteria Plans-Anyone doing them through
Vantage?

We are setting up a Section 125 Cafeteria Plan for dependent care and
medical expense reimbursements. I would be interested in learning how others
are doing all the recordkeeping that accompanies this as well as knowing
what kinds of issues to expect from employees.

Vantage does not currently have the capability to track Section 125
transactions or get the deductions noted to the proper boxes on the W-2.
Obviously, the deductions come out of payroll. We are planning on making
the reimbursement payments through A/P. Are others keeping balances
through Spreadsheets or a crystal or report builder report?

I am interested in your pearls of wisdom and any heads up to avoid stubbing
my toe.

Deb Wilmoth
Reeder & Kline Machine Co.




[Non-text portions of this message have been removed]
You may be right on the company keeping it. I know it is a federal law that
any amount not used cannot be refunded to the employee. I have handled these
plans previously but the employees always used it all up. Good luck!

Karen

Karen Brodniak
Accounting Manager
karen.brodniak@...

-----Original Message-----
From: Wilmoth, Deb [mailto:Deb@...]
Sent: Thursday, August 23, 2001 10:37 AM
To: 'vantage@yahoogroups.com'
Subject: RE: [Vantage] Section 125 Cafeteria Plans-Anyone doing them through
Vantage?

Karen, thank you very much for taking the time to respond to my question.
We are also on Version 4.
Since we are jumping in to the whole program at one time, I appreciate
knowing how you are & will be addressing these payroll issues.

Sure would like Vantage to do more to help. Excel is great, but keeping
everything within Vantage is better. This is the first payroll issue that
Vantage hasn't handled for us. Support said they didn't know how others did
it. Hence the glory of Yahoo groups!!!!

We are stressing very thoroughly to employees to only put in the money that
they know they will use.
However, it is my understanding that unused money goes to the company, not
the government. Time for me to do additional research.

Deb @ Reeder & Kline Machine Co.



Karen wrote:

We are currently using Vantage 4.0. We have a Sec 125 Cafeteria Plan but so
far, we only put the medical ins. deductions through the plan. Here is how
I will set it up when we go to out of pocket medical and daycare expenses:

Set up 2 liability accounts: Sec 125 Medical and Sec 125 Daycare
Set up 2 new deductions: Sec 125 Medical and Sec 125 Daycare
Sec 125 Medical and Daycare are not subject to Federal Withholding, Soc Sec,
Medicare, or FUTA. We are in the state of Washington and these benefits are
subject to State Unemployment Tax so check your state guidelines.
For the Daycare deduction, in the Special Type field, choose Pre-401k
Section 125
It is my understanding that the Medical deductions do not have to be
reported on form W-2 but can be in box 14, however Vantage doesn't seem to
allow you to elect any deduction to go to this box.

Keep separate spreadsheets on each employee for Medical and Daycare
activity. The balance of all medical at month end should agree with the
liability account. Same for daycare.

Remind employees that any contributions not used by the deadline for
submitting claims are lost to the government.

Hope this helps.

Karen Brodniak
Accounting Manager
karen.brodniak@...

-----Original Message-----
From: Wilmoth, Deb [mailto:Deb@...]
Sent: Wednesday, August 22, 2001 2:01 PM
To: vantage@yahoogroups.com
Subject: [Vantage] Section 125 Cafeteria Plans-Anyone doing them through
Vantage?

We are setting up a Section 125 Cafeteria Plan for dependent care and
medical expense reimbursements. I would be interested in learning how others
are doing all the recordkeeping that accompanies this as well as knowing
what kinds of issues to expect from employees.

Vantage does not currently have the capability to track Section 125
transactions or get the deductions noted to the proper boxes on the W-2.
Obviously, the deductions come out of payroll. We are planning on making
the reimbursement payments through A/P. Are others keeping balances
through Spreadsheets or a crystal or report builder report?

I am interested in your pearls of wisdom and any heads up to avoid stubbing
my toe.

Deb Wilmoth
Reeder & Kline Machine Co.




[Non-text portions of this message have been removed]




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83:HM/A=765263/R=0/*http://www.verisign.com/cgi-bin/go.cgi?a=b15334027000300
0>


Useful links for the Yahoo!Groups Vantage Board are: ( Note: You must have
already linked your email address to a yahoo id to enable access. )
(1) To access the Files Section of our Yahoo!Group for Report Builder and
Crystal Reports and other 'goodies', please goto:
http://groups.yahoo.com/group/vantage/files/.
(2) To search through old msg's goto:
http://groups.yahoo.com/group/vantage/messages
(3) To view links to Vendors that provide Vantage services goto:
http://groups.yahoo.com/group/vantage/links

Your use of Yahoo! Groups is subject to the Yahoo! Terms of Service
<http://docs.yahoo.com/info/terms/> .


[Non-text portions of this message have been removed]
Unused money goes back to the Plan. It can then be used to pay Plan expenses
but does not go back to the Company for discretionary use.

Jim O'Donnell
Camcraft, Inc.


-----Original Message-----

We are stressing very thoroughly to employees to only put in the money that
they know they will use.
However, it is my understanding that unused money goes to the company, not
the government. Time for me to do additional research.

Deb @ Reeder & Kline Machine Co.