What Is Cafeteria Money

A cafeteria plan is an employee benefit plan that allows staff to choose from a variety of pre-tax benefits. Employees can contribute a portion of their gross income before any taxes are calculated and deducted.

What is an example of a cafeteria plan?

Common examples of Section 125 cafeteria plans: Premium Only Plans (aka POPs, see Section 125 Premium Only Plan Rules & Regulations) Flexible Spending Accounts (aka FSAs) Contributions to Health Savings Accounts (aka HSAs)

What benefits can be offered under a cafeteria plan?

Other common benefits that can be offered under a cafeteria plan include the following: health savings account (HSA) contributions; group-term life insurance on the life of an employee (although the cost of coverage in excess of $50,000, less any amount paid after-tax, is includible in the employee’s gross income);