The Section 125 cafeteria plan must be
maintained by an employer for the benefit of employees only, and must meet
several conditions:
• The Section 125 cafeteria plan must be
written.
• The Section 125 cafeteria plan must be available to all eligible
employees.
• The Section 125 cafeteria plan must include two or more benefits
consisting of cash and qualified benefits.
The Section 125 Cafeteria Plan Qualifying
Benefits
A The Section 125 cafeteria plan qualified
benefit is any benefit which is not includable in the gross income of the
employee by an express statutory exclusion (except educational assistance
programs, scholarships, van pooling, or excludable fringe benefits).
Qualifying benefits include:
• Group-term life insurance premium
costs.
• Disability income and accident insurance costs.
• Health insurance premium costs.
• Dental insurance premium costs.
• Medical costs not covered by insurance.
• Qualified dependent care costs.
• Contribution to a qualified 401(k) pension plan.
