Flexible Benefits Plan (Section 125)

The City of Manhattan Flexible Benefits Plan is an employer sponsored program that can save employees tax dollars by allowing them to use before-tax dollars to pay for certain eligible benefits. Employees may elect to have money deducted from their salary to pay the health insurance premium, uninsured medical expenses, and child care expenses they anticipate incurring over the year. Monies are deducted from the employee’s salary before taxes. By using before-tax dollars, federal, state and social security taxes are reduced, which increases an employee’s after-tax, or net income.