Comprehensive Cafeteria Benefits plan 2025

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A cafeteria plan is a type of benefit plan offered by employers that allows employees to choose between taxable and non-taxable benefits. The cafeteria part of the name comes from the plans flexibility, which allows employees to pick which benefits they want.
A cafeteria plan is the overarching term for a Section 125 plan. A Premium Only Plan (POP) is the most basic type of cafeteria plan. It allows employees to pay their portion of group health benefits, dental, and vision insurance premiums with pre-tax dollars.
Administration: There is usually a setup fee, and although offset by the cost savings, the initial cost and additional infrastructure expenses may be more than some small businesses can manage. Plus, cafeteria plans can be complex and time-consuming to administer.
Benefits of cafeteria plan Employee choice: Your employees choose how much in pretax dollars they want to contribute and how they want to spend that money. Reduced tax liability: With employee contributions being pretax, they get the advantage of having a lower gross income to reduce their tax liability.
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