Blog: Cafeteria Plans

Nearly every employer that deducts health premiums pre-tax is operating a Section 125 cafeteria plan — and a meaningful number of them do not have a written plan document, have never run nondiscrimination testing, and allow mid-year election changes that the rules do not permit.

Quick answer: A cafeteria plan is the mechanism that allows employees to pay for qualified benefits with pre-tax dollars. It requires a written plan document, must satisfy