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A Comprehensive Guide to Cafeteria Plans, Part II

If you sponsor a plan through which employees can make an election between taxable cash and nontaxable benefits, you have a cafeteria plan under Section 125 of the Internal Revenue Code. In its most common form, a cafeteria plan is either a "premium only plan" or "POP", or it is a flexible spending arrangement consisting of a health care reimbursement program and a dependent care assistance plan. More comprehensive versions of cafeteria plans actually allow employees to make annual benefit elections and trade specific benefit dollars to create a customized, taxadvantaged benefit program for themselves and their family. Using numerous examples to illustrate how the rules work in actual practice, ARCs informationpacked Cafeteria Plan webcast, Part I (of two) will cover these important cafeteria plan requirements and many more . . . Individual benefit requirements Premium only plans (premium conversion plans) Health Flexible Spending Arrangements (Health FSAs) Reimbursable expenses IRS test for reimbursabilityOverthecounter drugs and "stockpiling" rules Claims procedures Uniform Coverage rule Forfeiture rules (use it or lose it) Dependent Care Assistance Plans Qualifying dependents Qualified expenses Deemed income rules Comprehensive cafeteria plans and trading benefit credits Discrimination testing Impact of other federal laws What cafeteria plan election and payment options must be offered when an employee has an FMLA leave of absence When and how COBRA continuation must be offered The application of HIPAA Privacy and Security Standards rules What ERISA requirements must be met In discussing each of these important concepts, we will address many tricky issues that can arise in the administration and maintenance of a cafeteria plan, including: If a court orders a divorced employee to pay child care expenses, can the employee pay them pretax through a dependent care account? What kinds of overthecounter items can be reimbursed by a Health FSA plan and how do the IRSs rules against "stockpiling" impact the eligibility of these expenses? How do the discrimination tests work and how often must they be met? What special rules apply to individuals whose FMLA leave extends beyond the end of the plan year? Dont miss this opportunity to get up to speed on the complex cafeteria plan requirements and the practical steps to bring your administration initiatives into compliance.

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