Real Estate agents and Independent Contractors.

[GBurns]

Can licensed Real Estate agents and/or Independent Contractors participate in an "employers" group health plan and also use the section 125 Cafeteria plan to pre-tax their portion of the premium?

[SLuskin]

George, I have only 1 client that is a Real Estate agency. They do not permit the agents to participate in any of the benefits because they are independent contractors.

Alot might depend on their contracts. If you remember the Microsoft case, the contractors were treated like employees for purposes of hours worked, projects they worked on, who they reported to, etc. So the IRS determined that they were, in fact, employees, and needed to participate in the 401K (don't recall if other benefits were involved in this ruling).