Pre-Tax Insurance Premiums
Employees pay lower income taxes when they enroll in
TLC-sponsored medical, dental, vision, and life insurance. Premiums are
automatically deducted on a pre-tax basis, which lowers the employee’s taxable
income—creating tax savings to the employee and increasing take-home pay
compared to paying the premiums after-tax.
Pre-Tax Health Care
Employees can increase their take-home pay even more when they
use pre-tax dollars to pay for out-of-pocket health expenses they would otherwise
have to use after-tax dollars to pay. The employee elects the desired amount
each year to be deducted from their pay on a pre-tax basis, and that money is
set aside in a health care flexible spending account. The employee can then be
reimbursed via payroll for health care expenses he or she must pay anyway
during the year—this could be amounts subject to copays and deductibles in a
health insurance plan, prescription copays, dental and vision expenses not paid
by insurance.
Pre-Tax Dependent Care
Employees can further increase their take-home pay when they use
pre-tax dollars to pay for out-of-pocket dependent care expenses they would
otherwise have to pay with after-tax dollars. The employee elects the desired amount
each year to be deducted from their pay on a pre-tax basis, and that money is
set aside in a dependent care flexible spending account. The employee can then be
reimbursed via payroll for dependent care expenses he or she would have to
pay anyway during the year—this could be day care for children under 13 while
the parents are at work, or adult day care in certain circumstances.
