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
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.
, 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