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Cafeteria Plan |
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Cafeteria plan. Some employers offer cafeteria plans, more formally known as flexible spending plans, which give you the option of participating in a range of tax-saving benefit programs. If you enroll in the plan, you choose the percentage of your pretax income to be withheld from your paycheck, up to the limit the plan allows. You allocate your money to the parts of the plan you want to participate in. For example, you can set aside money to pay for medical expenses that aren't covered by insurance, for child care, or for additional life insurance coverage. As you incur these kinds of expenses, you are reimbursed from the amount you have put into the plan. Since you owe no income tax on the money you contribute, you actually have more cash available for these expenses than if you were spending after-tax dollars. However, you must estimate the amount you're going to contribute before the tax year begins, and you forfeit any money you've set aside but don't spend. For example, if you've set aside $1,500 for medical expenses but spend only $1,400, you lose the $100. In some plans the deadline for spending the money in your flexible spending account is December 31. Other plans provide up to a three-month extension. Cafeteria Plan A plan wherein an employer offers a choice of salary or specified nontaxable fringe benefits from which participating employees may select. The plan may be funded with employer contributions, employee contributions (usually through salary reduction agreements) or a combination of both. Also called a section 125 plan. How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content. |
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About 65% of revenues come from health and welfare plan services, 30% from retirement plan design, consulting and administration and 5% from payroll services and cafeteria plan administration. The district will phase in portions of the so-called healthy cafeteria plan, including reducing sodium, fat and sugar levels in foods, eliminating trans fats and using more whole grains. The IRS has allowed employers a great deal of flexibility in how they fired their employees' HSA accounts if a cafeteria plan is used. |
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