is medical insurance premiums pre tax
Section 125 Plans. Section 125 plans provide a simple and effective way to add employee benefits, especially for businesses with a number of employees who regularly have medical and childcare expenses. Employees can deduct their insurance premiums pretax and set aside pretax funds to use toward qualified medical and dependent care expenses. With a section 125 flexible spending account, employees can save an average of 30% in federal, state, and local taxes on items they already pay out-of-pocket.