cafeteria plan vs. Welfare plan difference?

[Guest Pecos]

Medical:

If a group Health Insurance plan allows employees to deduct pretax premiums from their paycheck, does this automatically change it from a welfare plan to a cafeteria plan? Participant eligibility will continue to be based on the section 152 dependent rules.

[Bill Presson]

Medical:

If a group Health Insurance plan allows employees to deduct pretax premiums from their paycheck, does this automatically change it from a welfare plan to a cafeteria plan? Participant eligibility will continue to be based on the section 152 dependent rules.

The insurance remains a welfare plan. In order to deduct premiums on a pretax basis, you need a cafeteria plan document, so you would have both.

[GBurns]

It is not the group health insurance plan that "allows employees to deduct pretax premiums from their paycheck". It is your employee benefits plan that adopted a cafeteria plan thereby allowing the pre-taxing.

[Guest Pecos]

Would there typically be two 5500s for the two plans or just one 5500 filed as a welfare plan?

[Bill Presson]

Would there typically be two 5500s for the two plans or just one 5500 filed as a welfare plan?

Just one (if required to file) for the welfare. Cafeteria plans aren't required to file anymore.

[GBurns]

Doesn't the cafeteria plan exemption depend on the size/number of participants ?

[Guest Pecos]

It will be for around 200 employees

[Bill Presson]

Doesn't the cafeteria plan exemption depend on the size/number of participants ?

I didn't word my reply very well. The requirement for filing the schedule F for cafeteria plans has been eliminated. In the situation presented, one 5500 is still all that is needed.