125 interest bearing account

[Guest wingnut]

can you set up your 125 trust account to make interest ont he monies deposited. If yes, what is the proper methos of distributing the interest? Can you pay fees with the interest?:eek:

[Joe Priselac]

There is no requirement that a cafeteria plan have a trust. Benefits are typically paid out of the general assets of the employer and as such can be invested in an interest bearing account. The interest earned would belong to the employer.

[mroberts]

If you have less than 50 employees and want the interest to go to your employees, you can set up a Medical Savings Account. If you need more information on MSAs, please let me know.