Guest Sheryl Kopsing Posted November 20, 1999 Posted November 20, 1999 Can anyone shed some light on how the adoption assistance Section 127 works under a cafeteria plan. Is it a reimbursement type benefit? Help!
Guest Sheryl Kopsing Posted November 20, 1999 Posted November 20, 1999 Excuse the wrong Code Section. I should be Code Section 137 for the Adoption Assistance question. Sorry!
Lisa Hand Posted November 20, 1999 Posted November 20, 1999 Yes, you can include Adoption Assistance in a Section 125 Plan. It works like Dependent Care Assistance, the funds are available once they have been payroll deducted. However, the sponsor must be very clear to anyone who wishes to participate that it is, like all benefits under 125, subject to the "Use it or Lose it" rule, regardless of what the situation is, the expenses must be incurred during the plan year. So if the adoption was delayed and actually happened the following plan year, the participant would lose some or all of their money.
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