Cafeteria Plan (Section 125)
A Cafeteria Plan (under IRS Code Section 125) is a benefit available when you choose an eligible health plan with your employer. It allows you to withhold a portion of your pretax salary to cover your insurance premiums and certain medical and child care expenses. This allows you to pay less taxes and increase your take home pay at the same time.
Since the plan is regulated by tax laws, there are rules about when you can change your plans that are under Section 125. Some life events that may allow for a change include:
- Getting married
- Having or adopting a baby
- Change in dependents
- Changes in eligibility, as determined by the plan
- Changes in work status
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Ask about benefits through First Financial where you work.