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My employer maintains that he provides a "cafeteria plan" which reduces my income by the amount of my medical insurance premiums for tax savings. I checked the IRS definition under Section 125 which says the employee must be able to "choose between cash and certain qualified benefits". I have had this with other employers. Essentially, if you didn't want any benefits (i.e. already covered on spouse's plan) you could receive cash instead. My current employer says I'm wrong, he does not have to offer that. Any comments appreciated.
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My employer maintains that he provides a "cafeteria plan" which reduces my income by the amount of my medical insurance premiums for tax savings. I checked the IRS definition under Section 125 which says the employee must be able to "choose between cash and certain qualified benefits". I have had this with other employers. Essentially, if you didn't want any benefits (i.e. already covered on spouse's plan) you could receive cash instead. My current employer says I'm wrong, he does not have to offer that.

I don't know what your employer is doing, but it's not a cafeteria plan as defined in Internal Revene Code section 125(d)(1):

In general

The term 'cafeteria plan' means a written plan under which -

(A) all participants are employees, and

(B) the participants may choose among 2 or more benefits consisting of cash and qualified benefits.


I also don't have any practical advice for you, unless you're working under a contract, in which case you might want to talk to a labor lawyer.

TMF ExRO
Phil Marti
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