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Posted

A state government offers a Section 125 cafeteria plan to state employees.  However, I have the same question even if it's a private employer.  A sales person from another company is approaching the state/employer, saying that his company can offer a second plan that will supplement or compliment the first plan.  I'm very leery of promises that seem to be too good to be true from sales people.  Can the state/employer tack on another plan without running into trouble?  Even the logistics of trying to operate 2 plans seems confusing, but just because it's beyond my scope of understanding doesn't mean it can't be done, I suppose.

Posted

I have never heard of any regulation that requires any employer to offer only 1 plan, so I believe it is legal, but will defer to others.  Aside from that, I am curious as to why an employer would have the need for multiple vendors.  A 125 is relatively easy to implement and operate, with relatively few benefits.  Can you expand on why the need for 2nd vendor?

Posted

An employer can offer more than one cafeteria plan.  It needs to make sure the arrangement does not run afoul of the cafeteria plan nondiscrimination tests.  

Posted

leevena:  My best guess is the current plan offers a couple of benefits and the sales person picked up on the fact that more could be offered.  He/she probably said something like "you only are getting A and B.  I can offer X, Y and Z!"

  • 1 month later...
Posted

i would advise against running multiple cafeteria plans.  everything can be handled under one umbrella.  besides, as chaz points out, you still have to deal with discrimination testing across the board.

and bingo qdrophile.  this reeks of afcrap.

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