Web6 okt. 2024 · Employer Contributions to HSA—Rules. There are two ways an employer can contribute to an HSA—with or without a Section 125 plan. Below, we cover each option in more detail. With a Section 125 Plan. A Section 125 plan, also called a cafeteria plan, lets workers set aside part of their salary on a pre-tax basis. Web15 okt. 2024 · Is a cafeteria plan the same as an HSA? Employers may choose to make contributions to their employees’ HSAs as part of a Section 125 plan (also known as a “cafeteria plan” or a “salary reduction plan”). Employers gain greater savings by allowing their employees to contribute on a “pre-tax” basis to their own HSA via payroll deduction.

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WebThe HSA is not a health plan and not subject to ERISA, so there is no benefit plan document for the HSA. However, employers that allow employees to make pre-tax payroll HSA contributions must create (or amend an existing) Section 125 Cafeteria Plan .‡ business service management solution

Health Savings Accounts: Do You Know What a Cafeteria Plan Is?

WebWhat is a Flexible Spending Arrangement (FSA)? Flexible Spending Arrangements (FSAs) are tax-free, "use it or lose it" savings accounts for medical and certain non-medical expenses. FSAs are set up by an employer in a cafeteria plan, where your employer provides certain benefits on a pretax basis. Web1 mrt. 2024 · An employee with annual compensation in the preceding year exceeding the amount in Sec. 414 (q) (1) (B) ($125,000 for plan years beginning in 2024 and $130,000 … WebCAFETERIA PLAN _____(COMPANY NAME) does hereby amend our existing IRC Section 125 Cafeteria Plan as follows: We elect: 1. Not to make any changes in respect to IRS notice 2013-71 effective October 31, 2013 2. We elect to amend this plan to allow for the “Rollover” provision as describe in IRS Notice 2013-71 business service contract template