The Handbook of Employee Benefits: Health and Group Benefits 7/E, 7th Edition

CHAPTER 25Cafeteria Plan Design and Administration

Amy L. Cavanaugh

With the ever-increasing costs of benefits requiring employers to pass more of the benefit expense to employees, some form of cafeteria plan has become a standard benefit offering to today’s employees. Through a cafeteria plan an employer can offer employees with vastly differing benefits needs some flexibility with respect to optional or supplemental benefit choices in addition to enabling them to pay for the benefits with pre-tax dollars. Allowing employees to select the benefits most appropriate to their personal needs and financial circumstances makes good sense for employers because it assures that the employer maximizes the value of its benefit dollars and avoids spending ...