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A benefit program under Section 124 of the Internal Revenue
Code that offers employees a choice between permissible taxable benefits,
including cash, and nontaxable health and welfare benefits such as life and
health insurance, vacation pay, retirement plans and child care. Although
a common core of benefits may be required, the employee can determine how his or
her remaining benefit dollars are to be allocated for each type of benefit from
the total amount promised by the employer. Sometimes employee
contributions may be made for additional coverage.
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