Cafeteria Pland

[Guest cconnell]

I'm not too versed in cafeteria plans.

Question: If an employer wants to pretax health insurance premiums, does a formal plan document have to be in place? Even if they are not required to file a 5500 due to participants being under 100?

Thank You,

CConnell

[leevena]

Yes, it must be in writing and made available to participants.

[Chaz]

In short, yes, in order for employees to pay their premium contributions on a pre-tax basis, the contributions must be made pursuant to a written cafeteria plan document, as per the proposed cafeteria plan regs. There is no exception for small plans.

The regs require that the written plan must (at least):

-- describe all benefits

--set forth the eligibility rules

--describe the election procedure

--provide details on irrevocability rules

--state how contributions are made

[oriecat]

Agreed, but if you are only doing premiums and not other cafeteria benefits, then a Premium Only Plan (POP) document should be pretty small and inexpensive to get.