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cafeteria plan vs. Welfare plan difference?


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Medical:

If a group Health Insurance plan allows employees to deduct pretax premiums from their paycheck, does this automatically change it from a welfare plan to a cafeteria plan? Participant eligibility will continue to be based on the section 152 dependent rules.

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Medical:

If a group Health Insurance plan allows employees to deduct pretax premiums from their paycheck, does this automatically change it from a welfare plan to a cafeteria plan? Participant eligibility will continue to be based on the section 152 dependent rules.

The insurance remains a welfare plan. In order to deduct premiums on a pretax basis, you need a cafeteria plan document, so you would have both.

William C. Presson, ERPA, QPA, QKA
bill.presson@gmail.com
C 205.994.4070
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It is not the group health insurance plan that "allows employees to deduct pretax premiums from their paycheck". It is your employee benefits plan that adopted a cafeteria plan thereby allowing the pre-taxing.

George D. Burns

Cost Reduction Strategies

Burns and Associates, Inc

www.costreductionstrategies.com(under construction)

www.employeebenefitsstrategies.com(under construction)

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Doesn't the cafeteria plan exemption depend on the size/number of participants ?

George D. Burns

Cost Reduction Strategies

Burns and Associates, Inc

www.costreductionstrategies.com(under construction)

www.employeebenefitsstrategies.com(under construction)

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Doesn't the cafeteria plan exemption depend on the size/number of participants ?

I didn't word my reply very well. The requirement for filing the schedule F for cafeteria plans has been eliminated. In the situation presented, one 5500 is still all that is needed.

William C. Presson, ERPA, QPA, QKA
bill.presson@gmail.com
C 205.994.4070
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