cafeteria plan

(redirected from Section 125 Plans)
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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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References in periodicals archive ?
Employers that have offered Section 125 plans prior to introducing an HSA program are familiar with this process.
One of the most popular cost-savings strategies government finance officers use today is the Section 125 plan.
Prior to PPACA, several states sought to capitalize on the tax advantages of Section 125 plans by requiring or encouraging all employers to offer a cafeteria plan for the pre-tax payment of health insurance premiums, even if the employer did not sponsor a group health plan (Hall, Hager, and Orentlicher 2010).
Provides a tax credit for small employers for the cost of implementing a Section 125 Plan ($50 per employee; capped at $2,500)
Allowing LTC insurance the same advantages as other insurance products offered under section 125 plans creates a win-win situation, with cost savings for both the employer and the employee.
Kingsdale said it will take a lot of effort to get consumers and employers to rethink their approach to Section 125 plans.
Agents also should also be able to administer Section 125 plans and COBRA plans for ex-employees who pay their own premiums, but remain in the plan for a year.
Research by the Bureau of Labor Statistics for 1997 says that less than 4 percent of companies with fewer than 100 employees have Section 125 Plans.
Around 1982, realizing that no additional guidelines were imminent, corporations began to institute Section 125 plans based on their own interpretations of the tax code.
At the same time, regulations governing Section 125 plans have become more restrictive as the need for benefit restructuring has extended beyond welfare benefits to retiree benefits, including retiree medical.
Tenders are invited for Provide administer voluntary employee benefits and for administration of Section 125 plans including premium only plans.
Section 125 plans, or Cafeteria Plans, are relatively easy to establish and generally do not require the employer to submit any paperwork to the IRS or an annual IRS Form 5500 filing.