To maintain the taxadvantaged status of a cafeteria plan, employers must adhere to specific requirements, offer only qualified benefits, and operate the cafeteria plan and underlying benefit(s) in a manner that does not discriminate in favor of highly compensated employees.
This publication broadly outlines those requirements but focuses more specifically on “change of election” requirements, which are described in greater detail in the Permissible Midyear Change of Election Matrix included in the guide.
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