Define: Cafeteria Benefit Plan

A cafeteria benefit plan, also known as a flexible benefit plan, is an employee benefit program that allows employees to choose from a variety of pre-tax benefits options, such as health insurance, retirement plans, and dependent care assistance.

No, employers are not legally required to offer a cafeteria benefit plan. It is an optional benefit that employers may choose to provide to their employees.

Yes, employers have the flexibility to change the benefits offered under a cafeteria benefit plan. However, any changes must comply with applicable employment laws and regulations.

Generally, employees can only make changes to their benefit selections during the plan’s open enrollment period, unless they experience a qualifying life event such as marriage, birth of a child, or loss of other coverage.

Yes, employees can contribute to a cafeteria benefit plan with pre-tax dollars, which can result in tax savings for both the employee and the employer.

Yes, there are limits on the amount employees can contribute to certain benefits under a cafeteria benefit plan, such as health savings accounts (HSAs) and flexible spending accounts (FSAs). These limits are set by the Internal Revenue Service (IRS) and may change annually.

Yes, employers can offer different benefits to different groups of employees, as long as the distinctions are based on bona fide employment-related criteria and not discriminatory in nature.

It depends on the employer’s plan design. While the IRS allows employers to offer a carryover option for up to $550 of unused funds in FSAs, it is not mandatory. Employers may also offer a grace period or a limited rollover option instead.

In most cases, employees cannot continue their cafeteria benefit plan coverage after leaving their job. However, they may be eligible for continuation coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA) or other applicable laws.