Section 125 Plan Document Template

A cafeteria plan is defined in 125d1 as a written plan maintained by an employer under which all participants are employees and the participants may choose among two or more.

Section 125 plan document template. Under a section 125 program you may choose to pay for qualified benefit premiums before any taxes are deducted from employee paychecks. The purpose of the plan is to allow employees the opportunity to elect to pay the portion of medical insurance premium costs for which they are responsible either on a pre salary reduction basis. It is the intent that this plan shall qualify as a section 125 plan of irc as amended from time to time. Section 125 plan documents from pre printed downloaded or automated templates are unlikely to meet the requirements of all the bureaucracies overseeing section 125 plans.

To the extent provided in the adoption agreement the plan provides for the pre tax payment of premiums and contributions to spending accounts that are excludable from gross. Although most cafeteria plan documents include hipaa special enrollment rights under code section 9801f many plans likely do not allow for a 60 day election period. The section 125 program is a tremendous opportunity for you to enhance your benefits package. Premium only plan effective april 1 2014.

Section 101 plan this document basic plan document and its related adoption agreement are intended to qualify as a cafeteria plan within the meaning of code section 125. The plan is intended to qualify as a cafeteria plan under section 125 of the code so that optional. Sample plan document section 125 flexible benefit plan version 0117 the attached plan document and adoption agreement are being provided for illustrative purposes only. The premium only plan is the building block of the section 125 plan.

Section 12 purpose the purpose of the plan is to provide participants with a choice between cash and certain qualified nontaxable benefits as defined in section 125 of the internal revenue code. As is the case with our sample cafeteria plan documents since past special enrollment rights had only a 30 day timeframe. If there is no cafeteria plan document if the document doesnt satisfy the plan document requirements or if the plan fails to operate in accordance with the terms of the plan or section 125 rules the plan isnt a cafeteria plan and an employees election between taxable and non taxable benefits results in gross income to the employee. Cafeteria plan solely because under the plan the participant may choose among the benefits of the plan.

This document is intended as a.