Section 125 - Premium Only Plans

A Cafeteria Plan or Section 125 plan is an employee benefit plan that allows employees to select desired benefits from their employer's benefit package, "cafeteria" style.  The real benefit of this type of plan is that if set up in accordance with Section 125 of the Internal Revenue Code, the premiums can be paid with tax free money.  That's right...tax free. No federal income tax.  No state income tax. No Social Security or Medicare tax. 

Most health insurance policies and some life insurance policies are eligible for inclusion in a Section 125 Cafeteria Plan. Group term life insurance is eligible for a portion of the premium, up to $50,000 of coverage, to be included.

Some examples of insurance policies that are eligible for your Cafeteria Plan include:

• Health Insurance
• Dental Insurance
• Cancer Insurance
• Up To $50,000 Group Term Life Insurance on Employees Only
• Hospital Indemnity Insurance
• Accident Insurance
• Heart Attack & Stroke Insurance
• ICU/CCU Insurance
• Accidental Death and Dismemberment

	For more information or to download TASC forms, click here.