Cafeteria Plan Restatement

[Guest dbell]

Has there been any new guidance given on when a cafeteria plan needs to be amended? I am unclear of when or why I would update an existing cafeteria plan document. I understand that the FMLA provisions should operationally be in the plan but am unclear as to when it and various other laws are required to be in the plan.

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[mbozek]

One could ask the more interesting question which is what is the penalty if a 125 plan is not amended to comply with recent changes in the law? Some changes which do not pertain to 125 (e.g., HIPPA) could be viewed as optional since they do not affect the plan's tax status. Can a 125 plan be disqualfied for the failure to be amended with the changes to the law even if the plan is operated in accordance with 125? Prop. regs 1.125-1 Q-2 only requires that the there be a written document. There is no amendment period under the proposed regs. There is no requirement that plan be approved or even signed by the employer (compare proposed SEP regs 1.408-7(b) which require that the SEP instrument be signed by a responsible offical).