What is a Section 125 benefit plan?
A cafeteria plan, also known as a section 125 plan, is a written plan that offers employees a choice between receiving their compensation in cash or as part of an employee benefit. Employer contributions toward an employee’s cafeteria-plan benefits are not taxed.
What are IRS qualifying life events?
A change in your situation — like getting married, having a baby, or losing health coverage — that can make you eligible for a Special Enrollment Period, allowing you to enroll in health insurance outside the yearly Open Enrollment Period.
Is a Section 125 plan worth it?
Section 125 plans offer employees significant tax savings and could be an appealing part of any benefits package. Offering an appealing compensation plan is a great way to attract and retain employees, but a quality compensation plan includes not just a high salary but also an attractive benefits package.
Is Voluntary life section 125?
Specifically, when an employer offers group term life insurance as part of a group of individual contracts provided to a group of employees, these premiums may be taken on a pre-tax basis under a Section 125 Cafeteria Plan.
Is life insurance a section 125?
Section 125 plans let employees use pre-tax dollars for these benefits, which include health and life insurance.
Is voluntary life insurance section 125?
Is eligibility for Medicare a qualifying life event?
Being eligible to enroll in Medicare does not constitute being “entitled” to Medicare. Although a loss of coverage occurs when employees voluntarily remove themselves from the health plans, the reason (attaining other coverage, including Medicare) is not considered a qualifying event.
Is Long-term disability a pre-tax deduction?
Long-term disability (LTD) insurance provides you with income if you become disabled and are unable to work. If you choose to pay for the LTD premium with pre-tax dollars (as you do for most of your other FlexCare benefits) and you become disabled, your LTD benefits will be subject to federal income tax.
Is voluntary employee life insurance worth it?
Voluntary life insurance can be a valuable employee benefit. For those with medical issues it might be the best and most cost-effective means to obtain life insurance. Even for those with other policies purchased privately, voluntary life can be an inexpensive supplement to other life insurance coverage.
What are the allowed election changes under Section 125?
§ 1.125-4 Permitted election changes. (a) Election changes. A cafeteria plan may permit an employee to revoke an election during a period of coverage and to make a new election only as provided in paragraphs (b) through (g) of this section. Section 125 does not require a cafeteria plan to permit any of these changes.
What is a change in status that affects eligibility?
A change in status that affects eligibility under an employer ‘s plan includes a change in status that results in an increase or decrease in the number of an employee ‘s family members or dependents who may benefit from coverage under the plan . (ii) Application to other qualified benefits.
What is a midyear election change under Section 125 cafeteria plan rules?
While under existing Section 125 cafeteria plan rules a change in the employment status of a spouse would be a life event that allows a midyear election change, the new guidance does not require that employees provide documentation of this, or that a requested election change be consistent with any change-in-status event.
What does Section 125 of HIPAA mean?
SECTION 125 QUALIFYING EVENT. HIPAA requires group health plans to give special enrollment opportunities to certain employees, dependents and COBRA qualified beneficiaries. 26 CFR §1.125-4 (b).A “special enrollee” is allowed to enroll or change his or her existing plan option in the plan after: a loss of eligibility for group health
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