Section 125 Health Benefits in Georgia: What Employees Should Know

• Employee-paid health premiums through a cafeteria plan are exempt from income tax withholding, Social Security tax and Medicare tax (IRS Publication 15-B, 2026).
• The employee share of FICA is 7.65%, made up of 6.2% Social Security and 1.45% Medicare, and the Social Security wage base is $184,500 in 2026 (IRS Publication 15, 2026).
• Georgia's flat income tax rate is 5.19% for 2026, unchanged from the prior year (Bloomberg Tax, January 2026).
• Georgia's income tax return starts from federal adjusted gross income (Georgia Form 500, 2025).
• Georgia shops on Georgia Access, and 2027 open enrollment runs November 1, 2026 to January 15, 2027 (healthinsurance.org, 2026).

If you work in Georgia and see a Section 125 line on your pay stub, the short answer is that it is probably your health premium, taken out before most taxes. Georgia adds a flat state tax on top of the federal picture. This guide shows what you save, when you can change it, and what to ask HR if a deduction surprised you.

Reviewed by a licensed benefits professional. Last reviewed: October 21, 2026.

What are Section 125 health benefits in Georgia?

Section 125 health benefits in Georgia are health, dental or vision premiums that your employer lets you pay with pay that has not been taxed yet. The federal rule is the same in every state.

A Section 125 plan, also called a cafeteria plan, is a written employer plan that lets employees choose between cash pay and certain benefits. A cafeteria plan can offer accident and health coverage, dependent care assistance, group-term life insurance and an HSA (IRS Publication 15-B, 2026). Employee-paid accident and health benefits are exempt from income tax withholding, Social Security tax and Medicare tax (IRS Publication 15-B, 2026). Benecor's Section 125 pre-tax guide→ covers the federal rules in more detail.

Does Georgia tax Section 125 health contributions?

Georgia income tax starts from federal adjusted gross income, and qualifying Section 125 health premiums never enter federal wages in the first place. Georgia Form 500 begins with "Federal adjusted gross income (From Federal Form 1040)" (Georgia Department of Revenue, 2025).

Georgia's flat income tax rate is 5.19% for 2026, unchanged from the prior year (Bloomberg Tax, January 2026). Georgia's withholding methods use that flat rate. Your employer's payroll system decides how your pre-tax premium affects your state withholding each pay period. Ask payroll before you count on that part of the savings.

Georgia also has its own rules for adopting federal tax changes. Its tax code conformity date is January 1, 2025 (Bloomberg Tax, January 2026), so some newer federal changes may not apply on your state return. A tax professional can tell you how that affects you.

How much does a Section 125 plan save a Georgia employee?

A Section 125 plan saves a Georgia employee at least 19.65 cents on each pre-tax premium dollar at a 12% federal bracket. That is 7.65% FICA plus 12% federal income tax. State savings come on top if your payroll applies them.

FICA is the payroll tax that funds Social Security and Medicare. The employee share is 7.65% (IRS Publication 15, 2026). The federal bracket in the table is an example. Your own bracket may differ.

Your real number depends on your bracket and how payroll applies state withholding. Higher earners above the Social Security wage base of $184,500 stop paying the 6.2% part for the rest of the year (IRS Publication 15, 2026).

How do I read the Section 125 line on my Georgia pay stub?

The Section 125 line on your Georgia pay stub shows the total of your pre-tax benefit deductions for that pay period. Common labels include Sec 125, Cafe 125, S125 and Pre-tax medical.

Check these three things on your stub:

1. The amount per pay period. Multiply by the number of pay periods to see your yearly total.
2. The benefits inside it. Medical, dental and vision are often bundled into one line.
3. Your W-2. Box 1 should show wages after pre-tax deductions, and Box 14 may show a Section 125 or cafeteria plan label. Compare Box 1 with your Social Security and Medicare wage boxes.

Benecor's W-2 Box 14 guide→ explains the labels employers use.

Can I change my Section 125 election mid-year in Georgia?

You can usually change your Section 125 election mid-year only after a qualifying life event that your plan allows. Federal rules lock elections for the plan year unless an event such as marriage, birth, divorce or a loss of other coverage occurs (26 CFR 1.125-4, 2026).

Your employer's plan document decides which events count and how long you have to ask. Many plans give 30 days. Ask HR for the plan document and the exact deadline before you assume you can change anything. Benecor's qualifying life events guide→ lists the common ones.

What if I decline my employer's plan in Georgia?

If you decline your employer's health plan in Georgia, you need other coverage, and the marketplace is Georgia Access. Georgia Access had 1,324,295 private plan enrollees in 2026 open enrollment (healthinsurance.org, 2026). Enrollment was about 900,000 by early September 2026, a drop of roughly 30% (Atlanta Journal-Constitution, October 2026).

The 20.7% figure is a proposed average. Your own plan price can differ, and final rates may change. Check the January 1 enrollment cutoff on georgiaaccess.gov, since a plan chosen after the cutoff starts later. Premiums paid through Section 125 come out before federal income tax and FICA (IRS Publication 15-B, 2026), which lowers what employer coverage costs you. Compare that with a Georgia Access quote before you decline.

How do I ask HR about my Section 125 plan?

Send HR a short written request and keep the reply. Copy this email and fill in the brackets.

Benecor's Section 125 cafeteria plan guide→ explains how the plan works, and the Georgia Section 125 plan page→ covers the employer side. If you want a Benecor benefits expert to look at your situation, contact Benecor Health→.

Sources: IRS Publication 15-B, Employer's Tax Guide to Fringe Benefits (2026); IRS Publication 15, Employer's Tax Guide (2026); Bloomberg Tax, Georgia's Flat Tax Rate Unchanged for 2026 (January 5, 2026); Georgia Department of Revenue, Form 500 Individual Income Tax Return (2025); healthinsurance.org, Georgia health insurance marketplace (2026); Atlanta Journal-Constitution, Georgia 2027 ACA marketplace higher prices (October 2, 2026); 26 CFR 1.125-4, Permitted election changes (2026).