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let's see, chances are the only ones who hit the limit are HCEs, so in a given year the only people who get advantage are HCEs, which at the minimum probably fails BRF (if such a method were written into a document, which I find hard to believe)

SCP by definition does not involve filing. Late remittances are not a tax qualification matter unless the plan has not been operated in accordance with its terms. That would be your guide for determining what is required under EPCRS.

The whole point of the cafeteria plan is to provide a choice of cash or notaxable benefits. If the choice is cash ($200 or $50, or $250), then the cash is w-2 income. If the choice is benefits, then the nontaxable benefits are .... nontaxable (not included in income). "Choice" can occur by default -- the premiums are what the premiums are. If the employee gets the medical benefit and the residual cash, the employee has chosen the amount of cash. If the plan talks about "bonus" for amounts delivered in cash to the extent not applied to pay premium, the drafter of the plan is incompetent.