Define: Cafeteria Plan

A cafeteria plan, also known as a flexible spending arrangement (FSA), is a benefit program offered by employers that allows employees to choose from a variety of pre-tax benefits, such as health insurance, retirement plans, and dependent care assistance.

No, cafeteria plans are not required by law. They are voluntary benefit programs offered by employers as a way to provide additional benefits to their employees.

Generally, employees cannot change their cafeteria plan elections during the plan year unless they experience a qualifying life event, such as marriage, divorce, birth of a child, or a change in employment status.

No, cafeteria plan contributions are not subject to income tax. They are deducted from an employee’s salary before taxes are calculated, reducing their taxable income.

Yes, employees can contribute to a cafeteria plan even if they are not enrolled in a high-deductible health plan. Cafeteria plans offer a variety of benefits beyond health insurance, such as retirement plans and dependent care assistance.

It depends on the specific terms of the cafeteria plan. Some plans allow employees to carry over a portion of their unused funds to the following year, while others may require employees to use all funds by the end of the plan year or forfeit them.

Yes, employers can contribute to an employee’s cafeteria plan. They can choose to match a certain percentage of the employee’s contributions or make additional contributions as part of their overall benefits package.

It depends on the specific terms of the cafeteria plan. Some plans may allow employees to use funds for gym memberships if they are deemed a qualified medical expense, while others may not include this as an eligible expense.

In most cases, employees cannot continue their cafeteria plan benefits after leaving their job. However, they may be eligible for COBRA continuation coverage, which allows them to continue their health insurance benefits for a limited period of time, typically up to 18 months.