Section 125 Health Benefits in Ohio: 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).
• Ohio moved to a flat 2.75% personal income tax rate on income over $26,050 starting January 1, 2026 (EY Tax News, 2026).
• Ohio defines municipal "qualifying wages" as wages under section 3121(a) of the Internal Revenue Code, with listed adjustments (Ohio Revised Code 718.01).
• Ohio residents shop on HealthCare.gov, and 2027 open enrollment runs November 1, 2026 to January 15, 2027 (healthinsurance.org, 2026).

If you work in Ohio 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. Ohio adds a state layer and a city layer to the 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 20, 2026.

What are Section 125 health benefits in Ohio?

Section 125 health benefits in Ohio 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 Ohio tax Section 125 health contributions?

Ohio's municipal income tax starts from the federal FICA wage definition, which already leaves out qualifying Section 125 health premiums. Ohio law defines qualifying wages as "wages, as defined in section 3121(a) of the Internal Revenue Code," then lists adjustments (Ohio Revised Code 718.01).

That matters because your city tax is usually withheld from qualifying wages. Section 3121(a) wages are the wages subject to FICA, and cafeteria plan health premiums are exempt from FICA (IRS Publication 15-B, 2026). The Ohio code adds back certain items, such as some employee retirement plan contributions, so the number can differ from your Medicare wages. Your employer's payroll system handles the exact math.

Ohio also has a state income tax. Ohio moved to a flat 2.75% rate on income over $26,050 starting January 1, 2026, and updated its withholding tables for wages paid on or after August 1, 2026 (EY Tax News, 2026). Ask payroll whether your state withholding is reduced by your pre-tax premium before you count on that part.

How much does a Section 125 plan save an Ohio employee?

A Section 125 plan saves an Ohio 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 and city 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.

A city income tax would add more. At a hypothetical 2% local rate, that is another $8 a month. Your real number depends on your bracket, your city and how payroll reports local wages. 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 Ohio pay stub?

The Section 125 line on your Ohio 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. Your local wages box can differ from Box 1, so read it too.

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

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

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 Ohio?

If you decline your employer's health plan in Ohio, you need other coverage, and the marketplace is HealthCare.gov. Ohio's marketplace had 469,616 private plan enrollees in 2026 open enrollment, down from more than 583,000 the year before (healthinsurance.org, 2026).

ACASignups.net is an independent tracker that compiles state rate filings, so treat its averages as an estimate and confirm your own plan prices on HealthCare.gov. Federal subsidy enhancements expired at the end of 2025, and households above 400% of the federal poverty level no longer qualify for premium subsidies (healthinsurance.org, 2026). 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 marketplace 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 Ohio 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); Ohio Revised Code 718.01, Municipal income tax definitions (Ohio Laws and Administrative Rules); EY Tax News, Ohio releases modified 2026 income tax withholding formulas and tables (July 2026); healthinsurance.org, Ohio health insurance marketplace (2026); ACASignups.net, 2027 rate changes for Ohio (updated October 15, 2026); 26 CFR 1.125-4, Permitted election changes (2026).