Who Can Sponsor a Plan?

 

mycafeteriaplan bullet imageWho Can Sponsor or Participate in a Cafeteria Plan?

Virtually any company can sponsor a cafeteria plan for its employees, regardless of size. Eligible companies include:

  • “S” or “C” Corporations
  • Partnerships
  • Non-Profit Organizations
  • Government Entities
  • Limited Liability Companies (LLC)
  • Limited Partnerships (LLP)
  • Sole Proprietorships

There are some IRS restrictions on who is eligible to participate in the plan, however. Only employees of the plan sponsor (company) can participate. Non-eligible individuals include:

  • Self-Employed Individuals
  • Partners
  • A “More-Than-2%” Shareholder in an “S” Corporation
  • Owners of “C” Corporations, unless they elect no more than 25% of total plan contributions
  • Members of an LLC