Cafeteria Benefits Plan Options
What is a cafeteria plan?
A “Cafeteria Plan” is an umbrella for a group of employee benefit programs where eligible employees choose to participate and thus defer cash compensation. The IRS rules allow employees to use pre-tax dollars for payroll deductions for several of these programs, others can be non-taxed fringe benefits. The Cafeteria Plan guides the overall program in that these plans must not discriminate and most are ERISA plans. Specific Internal Revenue Code (“IRC”) sections govern the rules and procedures for each program within the Cafeteria Plan framework. These benefits are primarily for employees, there are significant limitations on the participation allowed for self-employed individuals, S-Corp owners (2% or more), and partners.
Employers:
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** BSI Administrative Services would gladly assist in the design and implementation of these plans. However, we do not usually provide administrative support for these options, as most employers choose to administer them in-house, or use the investment provider or insurance carrier.
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