What Is A Cafeteria Plan For Health Insurance?

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    Samuel Smith
    Enrolled Agent-licensed to practice before the IRS, Samuel N Smith, EA, South Carolina
    A "cafeteria plan" refers to the section 125 of the tax code. A cafeteria plan allows you to have dollars deducted from your payroll at your employment to pay for some health insurance costs with "pretax dollars" like child care or prescriptions and doctor visits expenses, and to save for retirement. While the plans may vary from employer to employer in exact details you would be smart to utilize that "cafeteria plan". One word of caution- make sure any dollars saved if not used this year rolls over to the next year and that you DO NOT LOSE THE DOLLARS
    Answered on November 19, 2013
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