Cafeteria Plan

[jala]

Company has a cafeteria plan and the following benefits provided are on a pre-tax basis: health, dental, cancer policy and vision. Each benefit has more than 100 participants. The company is self-insured and has set up a "Trust" for the plan assets. I understand this requires filing and an independent audit.

The company also provides two benefits that are not under the cafeteria plan, so premiums are not pre-taxed for short term disability and group term life insurance. Participants in these benefits exceed 100 as well.

I know we no longer file for the "cafeteria plan", but must file for the welfare benefits under the cafeteria plan.

What about the two benefits not under the cafeteria plan? Must they be reported and if so, is a Schedule A for each benefit just attached to Form 5500 (even though the name on the 5500 reflects the cafeteria plan name?

I would appreciate it if someone could clarify for me.

[GBurns]

There seems to be some confusion between the "cafeteria plan" and the plan that is "self insured".

What is being "self insured" and which plan's assets are held in this "Trust"?

[jala]

There seems to be some confusion between the "cafeteria plan" and the plan that is "self insured".

What is being "self insured" and which plan's assets are held in this "Trust"?

The medical benefits are actually self-insured and premiums are deducted on a pre-tax basis under the cafeteria plan.

Form 5500 reflects the name of the cafeteria plan. Schedule A's are attached for each welfare benefit plan component under the cafeteria plan.

My question is: What about the benefits that are not covered under the cafeteria plan (pre-tax premiums)

that have more than 100 participants. Should a return be filed separately for them or can Schedule A information be prepared and attached to the Form 5500 that covers the pre-tax benefit plans?

The employee premiums and employer funding are deposited to the "Trust" each week for the self-insured medical benefit. The TPA has check writing priviledges for claims processing.

The remaining benefits under the cafeteria plan are fully insured and payments are sent directly to the provider.

Same holds true for the benefits not under the cafeteria plan (pre-tax) arrangement.

[QDROphile]

You file the 5500 for a plan. If you file one 5500 you have one plan. You must have defined your "plan" for puposes of the 5500 to include the health, dental, vision and cancer plans. You can expand the definition to include other plans that require a 5500 and stick with one 5500 that covers the other features that you currently perceive as separate plans. Some people call the arrangement an umbrella plan or a wrapper plan -- various plans are packaged into one. The inclusion of the other two plans does not mean they are an inappropriate part of the cafeterial plan. The definition of plan for purposes of the 5500 has nothing to do with the structure of the cafeteria plan. You have to be clear and careful with plan terms to assure that everything is covered and kept straight.

Gratuitous comment: Cancer policies can be inapprpriate for cafeteria plans because they oftern have a refund feature. If you don't get cancer, you get some cash. That violates cafetria plan rules against deferred compensation.

[jmor99]

Regarding the cancer plan with a return of premium feature: yes, those types of cancer plans are not allowed under a 125 for the reason mentioned. However, most of the carriers are not offering those anymore or if they do, the agent advises the client/employee that those types of cancer plans must be deducted post-tax outside the 125 plan.