Cafeteria Plans
How to Avoid Audits, Excise Taxes & Disqualification
Whether you call it a premium only (POP) plan, flexible benefit plan, Section 125 or cafeteria plan, offering group benefits on a pre-tax basis is a common employer practice.
However, many have forgotten about the Internal Revenue Service (IRS) and Department of Labor (DOL) rules. Employers who aren’t compliant face the risk of government fines, penalties and excise taxes for their organization, its employees and owners.
In an effort to ease the burden of shifting the cost of benefits to employees, the federal government allows employers to deduct the employee’s share of premium via pre-tax payroll deductions. This simple payroll function saves employers and employees thousands of dollars each year in taxes.
But in exchange for this special tax-savings, the IRS has some very specific rules. If an employer doesn’t follow the rules, the tax breaks aren’t allowed and the government will expect their share in back taxes (plus penalties and interest).
Employers with non-compliant cafeteria plans are at greater risk today (more than ever) due to the recent increase in joint IRS and DOL Audits. For the past 10 years, this collaboration brought on average more than $1.5 billion in fines and penalties each year from their enforcement efforts.
Learn how to protect your cafeteria plan from owing thousands of dollars in back taxes:
These FREE videos give you a detailed roadmap to ensure your cafeteria plan is compliant. They cover:
Group Benefit Compliance Requirements by Employer Size
An Integrated Approach to Compliance: A Must Have
Get these videos (and more) free!
- Grab these videos and also get other videos where you’ll learn about the most critical and often missed requirements under ERISA, COBRA, HIPAA, and the ACA.
- Get instant access to the checklist: 51 Essential Things To Have Before A DOL Audit.
- Browse our online “mini-courses” that teach you how to put together bullet-proof compliance project plans to avoid fines, penalties and lawsuits that can cripple your organization.
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