Gavel to Gavel: It's that simple By Mary Steichen


Article first published in The Journal Record - March 17, 2011.

With all the changes that have resulted from the recent health care reform legislation, one change could help make things easier for small employers - the "simple" cafeteria plan. Employers establish cafeteria plans generally to ensure that certain benefits can be paid for on a tax-free basis. Some of the benefits that qualify for inclusion under a cafeteria plan include group term life insurance, benefits under a self-insured medical expense reimbursement plan, and a dependent care assistance plan. The Internal Revenue Service requires that benefits provided under a cafeteria plan do not discriminate in favor of highly compensated employees, which can create an administrative headache for employers, particularly small employers.

Health care reform legislation encourages small employers to provide benefits under a cafeteria plan by providing a means to simplify the cumbersome process of benefits administration. The benefit of establishing a simple cafeteria plan to a small employer is that the employer is provided with a safe harbor from the nondiscrimination requirements for cafeteria plans as a whole, as well as from the nondiscrimination requirements for the specified individual qualified benefits offered under a cafeteria plan. While the Internal Revenue Service has not been vigilant regarding nondiscrimination testing for health and welfare benefits in the past, it has recently emphasized that the nondiscrimination testing requirements must be met in the future.

Article authored by McAfee & Taft Attorney: Mary Steichen.

Please see full article below for more information.

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© McAfee & Taft | Attorney Advertising

Written by:


McAfee & Taft on:

Popular Topics
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.