Section 125 Cafeteria Plans:
The Top Five Issues for Employers

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Section 125 cafeteria plans provide employers with the gateway (that many take for granted) to employee pre-tax contributions for health and welfare plan benefits.

This availability is the product of a complex system of cafeteria plan rules that permit employees to avoid constructive receipt—a concept that most have never considered. Those Section 125 irrevocable election, plan document, use-it-or-lose-it, and other key rules are very strict, and there is no correction program to prevent a potential full lost of tax-advantaged status upon plan operational failures. This makes understanding and complying with the Section 125 rules more important than most appreciate!

This session of ABD Office Hours covers the key Section 125 cafeteria plan rules that all employers should consider—including the special Covid-19 provisions that provide extensive temporary Section 125 relief.

Tuesday, July 20th, 2021
10:00am - 10:45am PT

This webinar will be recorded for future listening and will be emailed to all registrants. You can submit your questions in advance to [email protected] and we will try to address during the webinar.

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Topics for Discussion

Why Section 125 Matters: The safe harbor from the doctrine of constructive receipt
Plan Document: The cafeteria plan document adoption and content requirements for employers
Making/Changing Elections: The irrevocable election requirement, and the exceptions that may apply
Use-It-Or-Lose-It: Grace periods, run-out periods, carryover, forfeitures, and more!
Nondiscrimination: Overview of the NDT rules for each component, deep dive into the 55% average benefits test
Covid-19 Temporary Relief: Full carryovers for both FSAs, extended grace periods up to 12 months, election change relief, the Outbreak Period with disregarded deadlines, and the increased $10,500 dependent care FSA