cafeteria plan

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ca·fe·ter·i·a plan

(kafe-tē'ri-a plan)
Employee benefit plan that allows a choice between alternative nontaxable benefits.

cafeteria plan,

n an employee benefits plan in which employees select their medical insurance coverage and other nontaxable fringe benefits from a list of options provided by the employer.
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Letting cash-strapped owners use the plans themselves would be a cheap, simple way to encourage owners to offer the plans, advisors said today in Washington, at a hearing on cafeteria plans.
Cafeteria plans reimbursing premiums for individual health coverage with employer contributions if the employer is not participating in a Small Business Health Options Program (SHOP) Marketplace plan;
Instead of looking at the benefits plans individually, you really start to move toward what was envisioned with cafeteria plan legislation decades ago.
In other cafeteria plans, the employees are not necessarily given an allowance, but are offered a direct payroll deduction.
Payroll taxes and assessments do not apply to wages in cafeteria plans.
Usually only larger employers offer cafeteria plans with a full menu of benefits, but Section 125 cafeteria plans can also be set up for a single purpose such as paying health insurance premiums.
Dollar Limitations on Health FSAs under Cafeteria Plans: For a health FSA to be a qualified benefit under a cafeteria plan, the maximum amount available for reimbursement of incurred medical expenses of an employee, the employee's dependents and any other eligible beneficiaries of the employee, under the health FSA for a plan year, cannot exceed S2,500.
Some cafeteria plans provide for salary reduction contributions by the employee and others provide benefits in addition to salary.
Cafeteria plans, also described as "flexible benefit" plans or Section 125 plans, allow participating employees to choose between a number of non-taxable qualified benefits or taxable cash.
Aimed at lowering costs for both employees and their employers, cafeteria plans were created by a 1978 federal law which amended the Internal Revenue Code.
2096, the Long Term Care Affordability and Security Act, would allow long term care insurance to be included in employer-sponsored cafeteria plans and flexible spending accounts.
In an effort to make insurance coverage available and more affordable--and to increase the number of people who use commercial health insurance--several states have expanded the use of health premium cafeteria plans.