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  1. What are Cafeteria Plans?
  2. Are there advantages to offering a Cafeteria Plan?
  3. Must the company have group medical insurance to offer this plan?
  4. Are all employees required to participate in the plan?
  5. When can we begin our plan?
  6. How much will it cost to begin and continue this plan?
  7. Can employees change their elections at any time?
  8. What if employees don't use their entire annual election?
  9. What should the Company do with employee forfeitures?
  10. What are the plan maximums for the Flexible Spending Accounts?
  11. Are there any government requirements for having a Cafeteria Plan?
  12. Does Benefit Consulting, Inc. share client data with other firms?
  13. How does an employer go about getting their plan started?

What are Cafeteria Plans?

Cafeteria Plans are employer sponsored employee benefit plans that allow employees to elect benefits on a pre-tax basis.  Thereby ensuring that employees and employers save taxes.  
Congress legally provided for Cafeteria Plans in 1978 under IRS Code Section 125.  
They are also referred to as Flexible Benefit Plans or Section 125 Plans.

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Are there advantages to offering a Cafeteria Plan?

Yes!
*    Employers save payroll taxes
*    Employees save income taxes and take home pay increases
*    Increased employee morale
*    No net cost to implement a Cafeteria Plan

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Must the company have Group Medical Insurance to offer this plan?

No.  
Benefits that are offered to employees are controlled by the  Company.  Only the benefits that are available through each individual employer are deductible by the employees.

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Are all employees required to participate in the plan?

No.  
This is a purely voluntary plan.  

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When can we begin our plan?

Your plan can begin at any time.  Most employers chose the first day of any month.

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How much will it cost to begin and continue this plan?

Administrative costs are minimal compared to the tax savings this plan generates.  Please click here for our fee schedule.

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Can employees change their elections at any time?

Employees can only change their elections annually during the enrollment process.  Any changes after the start of the plan must be related to a qualifying event.  Click here to view a partial list of Qualifying Events.

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What if employees don't use their entire annual election?

Employees have ninety (90) days from the end of the plan year to submit claims for reimbursement from their Flexible Spending Account.  At the end of those ninety (90) days, any monies not claimed will be forfeited.

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What should the Company do with employee forfeitures?

Most employers use forfeitures to offset plan costs.

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What are the plan maximums for the Flexible Spending Accounts?

The maximum annual election for the Dependent Care FSA is $5,000 ($2,500 for married filing separately).  The Medical FSA maximum annual election is set by the employer. 

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Are there any government requirements for having a Cafeteria Plan?

Yes. 
 Discrimination testing must be performed to ensure that the plan does not discriminate in favor of key or highly compensated employees.
Plan Documents must be prepared and maintained.
The plan is subject to COBRA and FMLA.

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Does Benefit Consulting, Inc. share client data?

No.
All of the data supplied to us is secure and is not sold or shared.
Please see our Privacy Statement.

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How does an employer go about getting their plan started?

It is easy to get started.  Contact us to get started today!

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Last modified: December 18, 2010