Cafeteria Plans are employer-sponsored plans that allow employees the option of paying their medical, dental and vision premiums, any unreimbursed, eligible medical expenses such as co-pays and other medical expenses not covered by your benefit programs, as well as child care expenses with pre-tax dollars, thus increasing their take-home pay. Also called a “flexible spending account”, the name “cafeteria plan” derives from the similarity this program has to the choices available when you are in a cafeteria.
You control how much you think you may be able to use each year (this can be a bit tricky, as you must claim the amount to be spent in advance of the start of the program each year). Through a simple payroll deduction process, you are able to fund the Cafeteria account with each pay period, and the money is deposited to your account pre-tax. When you have eligible claims, you submit them for reimbursement. This program provides savings to both the employer (payroll taxes are reduced) and the employee (no income taxes on those deposits).
Some cafeteria plans let staff design his/her own benefit package, allowing the employee the flexibility of choosing between using funds to pay for one or more employee benefits and/or taking their benefit amount in cash.
Cutter & Company is committed to helping reduce the burden of plan administration. Our service representatives are available to assist in solving problems that emerge, such as billing, eligibility and claim issues.
There are certain dollar limits that apply. Feel free to contact us to learn more about these valuable employee benefits.