Types of Plans

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Cafeteria Plans or pre-tax benefit plans come in all shapes and sizes.

  • Cafeteria Plans: A Cafeteria Plan is a reimbursement plan governed by IRS Section 125 which allows employees to contribute a certain amount of their gross income to a designated account or accounts before taxes are calculated.
  • Flexible Spending Accounts: A Cafeteria Plan is a reimbursement plan governed by IRS Section 125 which allows employees to contribute a certain amount of their gross income to a designated account or accounts before taxes are calculated.
  • Health Reimbursement Arrangements (HRAs): An HRA is a type of Medical Reimbursement Plan (MRP) that allows the employer to contribute tax-free dollars to a designated employee account or accounts. These accounts are for employee reimbursement of out-of-pocket medical expenses (including some insurance premiums and deductibles).
  • Health Savings Accounts: Health savings accounts are tax favored accounts that can be contributed to by or on behalf of “eligible individuals” covered by certain high deductible health plans (HDHPs) to pay for certain medical expenses of eligible individuals and their spouses and/or tax dependents.
  • Medical Reimbursement Plans: A medical reimbursement plan or MRP is an employer-funded health plan that reimburses employees, their spouses, and dependents for certain medical care expenses not covered through any other health plan. An MRP is very similar to an HRA. However, unlike the HRA, an MRP does not establish employee accounts and therefore does not allow participants to carry over unused benefits to subsequent plan years.
  • Qualified Transportation Plans: A Qualified Transportation Plan (QTP) is a reimbursement plan governed by IRS Section 132 that allows employees to contribute a certain amount of their gross income to a designated account or accounts before taxes are calculated. These accounts are for specified transportation and parking expenses for commuters. Only employees (not owners) are eligible to participate in a QTP.