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.
References in periodicals archive ?
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. Matthew Tassey, who testified on behalf of the Falls Church, Virginia-based National Association of Insurance and Financial Advisors, said the current treatment of small business owners hurts workers.
* 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;
Defined contribution health arrangements and cafeteria plans generally allow employers to take a more proactive, top-line strategy view of benefits spending, he adds.
Similar to the SHOP exchange, employers using a private exchange can take advantage of cafeteria plan rules and allow employees to pay for their share of the premium on a pre-tax basis.
In other cafeteria plans, the employees are not necessarily given an allowance, but are offered a direct payroll deduction.
A full cafeteria plan, as opposed to a premium-only one, can incorporate unreimbursed medical coverage, dependant day care and commuter travel reimbursement coverage--all paid for with pretax dollars.
Payroll taxes and assessments do not apply to wages in cafeteria plans. These taxes include the employer's matching 7.65 percent for FICA, and unemployment insurance in many states (typically, from 1 to 5 percent but sometimes higher for specific industries).
One possible way for people with individual coverage to obtain the same tax benefits as employees is to pay for individual insurance through payroll deduction using a "cafeteria plan." Authorized by Section 125 of the Internal Revenue Code, cafeteria plans permit employers to offer voluntary benefits on a pre-tax basis.
MICR encoding - Full Reporting capabilities - EFTPS for batch filers - Prints All Federal and State forms on blank paper - Net to Gross computation - All Pension and Cafeteria plans - Multiple Check formats - Vacation and Sick leave accruals - Workers Compensation reports - Union Dues - Tips - Tip Sales - Tips deemed to be wages - W2's on plain paper - 1099's - Over 30 defined reports - Multiple report Groupings - Direct Deposit to Multiple Bank Accounts - Multiple Checking accounts - Third Party Checks or direct deposit of Garnishments, Child Support payments Savings Accounts, etc.
Small Employers May Establish 'Simple' Cafeteria Plans: The new law will provide an eligible small employer with a safe harbor from the nondiscrimination requirements for cafeteria plans and from the nondiscrimination requirements for specified qualified benefits offered under a cafeteria plan--including group term life insurance, benefits under a self-insured medical expense reimbursement plan and benefits under a dependent care assistance program.
The notice also states that employers with cafeteria plans may permit employees to immediately make pre-tax salary reduction contributions to provide coverage for children under age 27, even if the cafeteria plan has not yet been amended to cover these individuals.
A cafeteria plan (or "flexible benefit plan") is a written plan in which all participants are employees who may choose among two or more benefits consisting of cash and "qualified benefits." With certain limited exceptions, a cafeteria plan cannot provide for deferred compensation.