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Section 125 Cafeteria Plan Salary Reduction Agreement

The requirements set out in point (ii) of point A shall not be considered to be met if, according to the plan, the rate of wage reduction of a highly paid employee or a key worker at any rate is higher than that of a worker who is not a highly remunerated or significant worker. All plan participants must be current or former collaborators. While only employees can participate, spouses and loved ones can benefit from the plan. Independent persons, such as individual entrepreneurs or partners of a partnership, and persons who are 2% shareholders of an S company are not employees for this purpose. Detailed rules cover the types of status changes relating to employment, marital status, relatives, etc., that can be allowed in the plan documents. The term „qualified benefit” does not include a qualified health plan (as defined in section 1301(a) of the Patient Protection and Affordable Care Act, offered through a scholarship established pursuant to section 1311 of this Act. The CBA contained a provision that implied „simple cafeteria plans” for small businesses. Simple cafeteria plans are treated as non-discrimination requirements applicable to cafeteria plans when the plan is designed to meet the minimum right, participation and contribution requirements set by law. Section 125 allows employers with a qualified written plan to offer workers the choice between at least one eligible taxable benefit and at least one qualified non-taxable benefit, without the election itself triggering taxation.

Annual summary descriptions and notifications of staff eligibility and voting forms should be made available to authorised staff in good time before the start of each planning year. The DOL does not require Form 5500, Annual Return/Report of Employee Benefit Plan, for most social benefit plans that had fewer than 100 participants at the beginning of the year, including Section 125 plans, and IRS Communication 2002-24 suspended the requirement to submit feedback to the IRS. Annual discrimination test results should not be submitted to the government, but test evidence should be retained together with other planning documents. In general, no. If you only have a cafeteria plan, you do not need to submit a Form 5500 or Schedule F. However, if you have a social benefit plan, you may need to file a refund for that plan, in accordance with the rules of the Ministry of Labour. Please read the instructions on Form 5500 or contact the U.S. Department of Labor for more information.

You also benefit from the help of our after-sales service office. In accordance with the uniform coverage rule, the total amount of reimbursement available under a health ASL (less amounts previously reimbursed for the planned year) must be available throughout the year covered by the plan. This rule does not apply to benefits for dependent persons or adoption assistance. A cafeteria plan may rely on the adequate representation of a staff member who has the opportunity to register a qualified health plan through a marketplace that the employee and related persons have declared or intend to register for a qualified health plan for new coverage, which is revoked no later than the day following the last day of initial coverage, . . . .