595:
aggregate of such benefits provided for all employees under the plan," then the key employees must report their cafeteria plan benefits as income. Effective
January 1, 2011, eligible employers meeting contribution requirements and eligibility and participation requirements can establish a "simple" cafeteria plan. Simple cafeteria plans are treated as meeting the nondiscrimination requirements of a cafeteria plan and certain benefits under a cafeteria plan.
31:
608:, produced by the Employee Benefit Research Institute, "Wood's framework creates a specific detailed picture. The concepts include the establishment of a basic "safety net" of benefits to cover financial hazards associated with old age, death and disability, and catastrophic medical expenses, with supplementary benefits offered on a defined contribution basis".
616:
reimbursements were permitted only for claims incurred during the plan year. Under the new ruling, an employee who participates in a
Flexible Spending Account plan ending December 31 can still receive reimbursement for claims incurred through March 15 if the extended grace period is adopted by the employer.
649:
Reasons for implementing a
Section 125 plan are primarily for the tax savings advantages for the employer and employee. Both parties save on taxes and therefore increase their spendable income. Employees' pretax contributions are not subject to federal, state, or social security taxes. Employers save
594:
If the cafeteria plan discriminates in favor of highly compensated employees, the highly compensated employees will be required to report their cafeteria plan benefits as income. The second exception is that if "the statutory nontaxable benefits provided to key employees exceed 25 percent of the
619:
Since the "use it or lose it" fear of many employees was reduced significantly by the expanded claims reimbursement cycle, and access to funds can now be better targeted for purchases that the employee actually needs, there has been a clear increase in both the percentage of employees opting to
615:
In May 2005, the
Treasury Department and the Internal Revenue Service announced that, effective immediately, employers would be permitted to design cafeteria plans that enable participants to be reimbursed for claims incurred up to 2½ months after the close of a plan year. Before this notice,
603:
The
Cafeteria Benefits Plan resulted from Thomas Ellsworth Wood of Hewitt Associates and chairman of the Corporate Board for the International Foundation of Employee Benefit Plans. Wood, who once said, "One universal benefit program can no longer do the job," was the originator of flexible
653:
A cafeteria plan may permit an employee to revoke an election during a period of coverage and to make a new election only in limited circumstances, such as a change in status event. A change in status event includes changes in the number of an employee's dependents.
633:
through the plan. Though some cafeteria plans offer an explicit choice of cash or benefits, most today are operated through a "salary redirection agreement", which is a payroll deduction in all but name. Deductions under such agreements are often called
1050:
The following list of dual-purpose over-the-counter items can be reimbursed if used for medical purposes. They must be accompanied by a medical practitioner's note stating the item is to treat a specific medical condition and not a cosmetic procedure.
662:
The following is a list of common non-prescription over-the-counter items eligible for reimbursement, dual purpose items that may be reimbursable with a physician's statement and items that are not reimbursable. This list is not all-inclusive.
611:
Cafeteria plans were added to the
Internal Revenue Code in November 1978. Internal Revenue Code Section 125 sets forth the requirements and tax treatment of cafeteria plans. Section 125 has been amended multiple times since its enactment.
923:
The following is a list of over-the-counter items the IRS has determined to be primarily for medical care and eligible for reimbursement. Over-the-counter medicines are allowable only with a written recommendation from a physician.
638:. Salary redirection contributions are not actually or constructively received by the participant. Therefore, those contributions are not generally considered wages for federal income tax purposes, nor are they usually subject to
628:
Employees of employers with cafeteria plans may obtain such benefits as health insurance, group-term life insurance, voluntary "supplemental" insurance (dental, vision, cancer, hospital confinement, accident, etc.), and
1278:
906:
Pursuant to
Revenue Ruling 2003-102, over-the-counter drugs that are used to alleviate or treat personal injuries or sickness are now reimbursable through health care flexible spending accounts.
579:. Its name comes from the earliest such plans that allowed employees to choose between different types of benefits, similar to the ability of a customer to choose among available items in a
587:. To qualify, a cafeteria plan must allow employees to choose from two or more benefits consisting of cash or qualified benefit plans. The Internal Revenue Code explicitly excludes
604:
compensation due to the fact that
American corporations and households were becoming increasingly dynamic and globalized. As quoted in his chapter of the business publication
897:
Health insurance provided through an employee's spouse's group health plan is allowable only if the spouse paid for all or part of the coverage on an after-tax basis.
550:
1251:
639:
30:
1452:
284:
1114:
1109:
1389:
543:
620:
participate in a Flex Plan and in the level of annual elections, enhancing FICA savings for employees and employers alike.
1104:
591:
plans from qualifying as a cafeteria plan subject to a gross income exemption. Section 125 also provides two exceptions.
1390:"Internal Revenue Service Regulation 1.125-4: Permitted Election Changes. IRC, 2002FED ¶7320, Sec. 125, Cafeteria Plans"
643:
192:
1447:
630:
536:
479:
274:
197:
1119:
157:
104:
1249:
1457:
514:
391:
366:
324:
237:
1124:
588:
576:
439:
519:
489:
331:
294:
257:
1078:
464:
459:
361:
133:
499:
386:
114:
319:
304:
252:
232:
162:
119:
1062:
Dietary supplements or herbal medicines to treat medical conditions in specific circumstances
572:
411:
376:
371:
356:
341:
279:
247:
152:
38:
22:
1255:
509:
494:
454:
351:
336:
309:
289:
219:
209:
1074:
Hormone therapy and treatment for menopause symptoms such as hot flashes and night sweats
1400:
914:
Over-the-counter expenses eligible for reimbursement under a
Section 125 cafeteria plan
504:
469:
314:
264:
202:
74:
650:
on the employer portion of FICA, FUTA, and workers' compensation insurance premiums.
1441:
1057:
524:
484:
429:
54:
584:
449:
346:
84:
1237:
1295:
1222:
1207:
1192:
1180:
1168:
1156:
1144:
444:
406:
396:
381:
109:
99:
79:
69:
64:
1424:
692:
Blind persons accessories (seeing-eye dog, Braille training, special schooling)
658:
Medical expenses eligible for reimbursement under a
Section 125 cafeteria plan
223:
171:
124:
94:
89:
580:
1319:
1354:
59:
474:
299:
181:
142:
401:
242:
575:
plan offered in the United States pursuant to Section 125 of the
434:
269:
147:
45:
1092:
Weight-loss drugs to treat a specific disease including obesity
797:
Learning disability (doctor-recommended special schooling fees)
875:
Weight loss programs (doctor prescribed for medical reasons)
719:
Deaf persons' accessories (hearing aids, special schooling)
1320:
Publication 15-B: Employer's Tax Guide to Fringe Benefits
695:
Capital expenditures (home modifications for handicapped)
1279:"Cafeteria pension plans balance the now against later"
881:
Wigs (alleviation of physical or mental discomfort)
606:Business, Work, and Benefits: Adjusting to Change
863:Swimming pool (for polio or arthritis treatment)
812:Long Term Care Services (qualified medical only)
710:Contact lenses (including replacement insurance)
989:Menstrual cycle products for pain and/or cramps
583:. Qualified cafeteria plans are excluded from
1431:. Internal Revenue Service. November 20, 2015.
1399:. Commerce Clearing House, Inc. Archived from
761:Hair transplant (surgical and medical reasons)
1267:Pub. L. 95-600, 97 Stat. 2763 (Nov. 6, 1978).
1056:Acne treatment for medical condition such as
869:Television close caption prescribed by doctor
803:Lifetime medical care prepaid-retirement home
544:
8:
1065:Fiber supplements under narrow circumstances
860:Stop-smoking programs and prescription drugs
800:Legal expenses related to medical condition
866:Telephone equipment (for hearing impaired)
779:Insurance premiums (medical post-tax only)
674:Air conditioner filters for allergy relief
551:
537:
18:
818:Medical conferences (relating to illness)
809:Lodging (for medical care away from home)
1344:Internal Revenue Code Section 3306(b)(2)
1335:Internal Revenue Code Section 3121(a)(2)
1137:
1007:Pedialyte for hydration of an ill child
890:
640:Federal Insurance Contributions Act tax
419:
218:
170:
132:
37:
21:
16:Type of employee benefit plan in the US
1001:Nicotine gum/patches for stop-smoking
956:Cold packs and hot packs for injuries
827:Operation (legal, including abortion)
701:Childbirth prep classes (mother only)
7:
1068:Glucosamine/chondrotin for arthritis
713:Cosmetic Surgery (non-elective only)
815:Meals (medical care away from home)
743:Electrolysis (medical reasons only)
683:Attendant for blind or deaf student
1115:Corporate tax in the United States
1110:Payroll taxes in the United States
14:
1277:Walker, Ruth (December 6, 1983).
698:Car modifications for handicapped
998:Nasal sinus sprays, nasal strips
29:
1355:"Benefits of Section 125 Plans"
1022:Sleeping aids to treat insomnia
746:Elevator for cardiac conditions
1086:St. John's Wort for depression
986:Liquid adhesive for small cuts
962:Contact lens cleaning solution
821:Nursing home (medical reasons)
671:Adoption related medical costs
1:
1453:Taxation in the United States
1283:The Christian Science Monitor
1105:Taxation in the United States
1037:Visine and other eye products
995:Muscle or joint pain products
1071:Orthopedic shoes and inserts
950:Carpal-tunnel wrist supports
854:Sexual dysfunction treatment
824:Nursing services (home care)
734:Domestic aid (in-home nurse)
644:Federal Unemployment Tax Act
1031:Thermometers (ear or mouth)
1028:Sunburn ointments or creams
707:Christian Science treatment
1474:
770:Hospital care (in-patient)
740:Dyslexia language training
631:flexible spending accounts
1379:Treas. Reg. § 1.125-4(c).
480:Guaranteed minimum income
275:Diversification (finance)
1397:Internal Revenue Service
1324:Internal Revenue Service
1120:Internal Revenue Service
737:Drug addiction treatment
158:Employee stock ownership
105:Refund anticipation loan
1429:Office of Chief Counsel
1040:Wart remover treatments
75:Unsecured personal loan
935:Anti-diarrhea medicine
515:Universal basic income
392:Portfolio optimization
367:Investment performance
238:Alternative investment
1361:. Section125Plans.com
1226:26 U.S.C. § 125(b)(2)
1211:26 U.S.C. § 125(b)(1)
1181:26 U.S.C. § 125(d)(2)
1169:26 U.S.C. § 125(d)(1)
1125:Freelance marketplace
992:Motion sickness pills
980:Incontinence supplies
977:Hemorrhoid medication
968:Diaper rash ointments
752:Fertility enhancement
749:Eye exams and glasses
624:Features and benefits
589:deferred compensation
577:Internal Revenue Code
1425:Memorandum 201547006
1238:IRS Publication 15-B
788:Laetrile (legal use)
677:Alcoholism treatment
520:Volatility (finance)
490:Risk-return spectrum
332:Fundamental analysis
198:Defined contribution
1079:lactose intolerance
1010:Pregnancy test kits
944:Bug-bite medication
941:Band-aids, bandages
773:Indian medicine man
689:Birth control pills
465:Financial inclusion
460:Financial deepening
362:Investment advisory
134:Employment contract
1310:26 U.S.C.A. § 125.
1254:2012-08-10 at the
1196:26 U.S.C. § 125(b)
1157:26 U.S.C. § 125(a)
1046:Dual-purpose items
845:Prescription drugs
806:Limbs (artificial)
794:Lead paint removal
680:Ambulance services
636:pre-tax deductions
500:Structured product
440:Citizen's dividend
387:Passive management
115:Debt consolidation
1448:Employee benefits
1359:Section 125 Plans
1083:Prenatal vitamins
1019:Sinus medications
919:Eligible expenses
791:Laser eye surgery
561:
560:
233:Active management
163:Employee benefits
120:Debt rescheduling
1465:
1432:
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1199:
1190:
1184:
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1172:
1166:
1160:
1154:
1148:
1142:
1025:Spermicidal foam
929:Allergy medicine
907:
904:
898:
895:
851:Psychotherapists
848:Psychiatric care
842:Oxygen equipment
836:Orthopedic shoes
573:employee benefit
569:cafeteria system
553:
546:
539:
422:
412:Target date fund
377:Investor profile
372:Investment style
357:Impact investing
342:Growth investing
280:Equity (finance)
153:Salary packaging
33:
23:Personal finance
19:
1473:
1472:
1468:
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1466:
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1462:
1438:
1437:
1436:
1435:
1423:Beker, Harry. "
1422:
1418:
1409:
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1403:
1392:
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1348:
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1334:
1330:
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1302:
1296:26 U.S.C. § 125
1294:
1290:
1276:
1275:
1271:
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1262:
1256:Wayback Machine
1248:
1244:
1236:
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1217:
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1145:26 U.S.C. § 125
1143:
1139:
1134:
1129:
1100:
1095:
1048:
1043:
1034:Throat lozenges
1016:Rubbing alcohol
1013:Reading glasses
971:First aid cream
947:Calamine lotion
921:
916:
911:
910:
905:
901:
896:
892:
887:
755:Fluoride device
728:Diagnostic fees
660:
626:
601:
557:
510:Systematic risk
495:Social dividend
455:Economic bubble
420:
352:Hedge (finance)
337:Government bond
290:Estate planning
220:Personal budget
214:
210:Social security
193:Defined benefit
186:
17:
12:
11:
5:
1471:
1469:
1461:
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1455:
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1381:
1372:
1346:
1337:
1328:
1312:
1300:
1288:
1285:. p. B11.
1269:
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1038:
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1020:
1017:
1014:
1011:
1008:
1005:
1004:Pain relievers
1002:
999:
996:
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987:
984:
981:
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975:
974:First aid kits
972:
969:
966:
963:
960:
957:
954:
953:Cold medicines
951:
948:
945:
942:
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909:
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837:
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669:
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625:
622:
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597:
565:cafeteria plan
559:
558:
556:
555:
548:
541:
533:
530:
529:
528:
527:
522:
517:
512:
507:
505:Sustainability
502:
497:
492:
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477:
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470:Financial risk
467:
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457:
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409:
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265:Bond (finance)
262:
261:
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207:
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34:
26:
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15:
13:
10:
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1470:
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1458:Fiscal policy
1456:
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1445:
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1406:on 2010-05-29
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1058:acne vulgaris
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913:
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857:Sterilization
856:
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850:
847:
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758:Guide animals
757:
754:
751:
748:
745:
742:
739:
736:
733:
731:Doctors' fees
730:
727:
724:
721:
718:
715:
712:
709:
706:
704:Chiropractors
703:
700:
697:
694:
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623:
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571:is a type of
570:
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531:
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525:Watered stock
523:
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485:Market impact
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430:Asset pricing
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585:gross income
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450:Credit union
347:Growth stock
325:independence
85:Student loan
42:
965:Cough drops
833:Orthodontia
830:Organ donor
722:Dental fees
668:Acupuncture
642:(FICA) and
445:Cooperative
407:Stockbroker
397:Speculation
382:Market risk
110:Refinancing
100:Payday loan
80:Rent-to-own
70:Credit card
65:Charge card
1442:Categories
1410:2010-05-17
1132:References
1077:Pills for
878:Wheelchair
839:Osteopaths
248:allocation
224:investment
172:Retirement
125:Bankruptcy
95:Title loan
1089:Sunscreen
983:Laxatives
872:Vasectomy
782:Iron lung
581:cafeteria
300:Financial
253:economics
1252:Archived
1098:See also
932:Antacids
785:Lab fees
725:Dentures
716:Crutches
686:Autoette
646:(FUTA).
421:See also
60:Car loan
55:Mortgage
1326:. 2010.
959:Condoms
938:Bactine
776:Insulin
599:History
475:Fintech
320:planner
305:adviser
182:Pension
884:X-rays
258:growth
143:Salary
41:
39:Credit
1404:(pdf)
1393:(PDF)
767:HMO's
402:Stock
310:asset
243:Asset
1367:2011
435:Bank
315:plan
270:Cash
222:and
148:Wage
90:Pawn
46:Debt
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567:or
295:ETF
285:ESG
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