cafeteria plan

(redirected from Section 125 Plans)
Also found in: Medical, Financial.

cafeter′ia plan`


n.
a fringe-benefit plan under which employees may choose from among various benefits those that best fit their needs up to a specified dollar value.
[1985–90]
References in periodicals archive ?
08, analysis and design of benefits plans, including Internal Revenue Code Section 125 plans coupled with assistance in plan document drafting.
Paychex's human resource services include 401(k) plan recordkeeping, section 125 plans, a professional employer organization, time and attendance solutions, and other administrative services.
Section 125 plans also allow employees to make before-tax contributions to personal spending accounts that can be used for qualifying health-care or child-care expenses.
Our partnership with Acumatica also allows their end-users access to a variety of important payroll and HR-related services offered by CompuPay, including health insurance, 401(k) plans, section 125 plans and workers' compensation insurance.
What is much less common, and more innovative, is to use section 125 plans to pay for individual insurance, pretax and through payroll deduction, when the employer contributes nothing toward the premium.
Section 125 plans also may be used to pay health insurance premiums.
Thirty-three cents of the increase will be used to provide more needed childhood immunizations, the healthcare plan for low-income Hoosiers, smoking cessation programs, and help for small businesses to offer health insurance to their employees; 3 cents for increased Medicaid provider reimbursement rates, 5 cents for other health initiatives, and 3 cents for Section 125 plans (a plan that allows employers and employees to purchase health insurance on a pre-tax basis).
He said the Department of Revenue is planning to send out letters to employers about how to set up Section 125 plans for employees, and an employer brochure is being put up on the connector's Web site.
Section 125 plans benefit employers by reducing various payroll-related employment taxes, thus reducing payroll costs.
Agents also should also be able to administer Section 125 plans and COBRA plans for ex-employees who pay their own premiums, but remain in the plan for a year.
Research by the Bureau of Labor Statistics for 1997 says that less than 4 percent of companies with fewer than 100 employees have Section 125 Plans.
Around 1982, realizing that no additional guidelines were imminent, corporations began to institute Section 125 plans based on their own interpretations of the tax code.