What is a cafeteria plan?

A cafeteria plan offers participants a choice between receiving at least one taxable benefit and at least one non-taxable benefit.

A premium conversion plan is the simplest kind of cafeteria plan because it permits (but does not require) participants to pay for premiums with pre-tax dollars rather than with after-tax dollars.

In addition, a cafeteria plan can also incorporate the following provisions:

• Reimbursement accounts for medical and dental and other health-related expenses not covered by the Company’s health plan
• Reimbursement accounts for dependent-care expenses

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