Section 125 Plans (cafeteria Plans)
Definition of "Section 125 plans (cafeteria plans)"
Additions made by Congress in 1978 to the Internal Revenue Code that provide an employee benefit plan under which the employee makes an irrevocable decision to forego a portion of future income in exchange for receiving future benefits not subject to income tax at reception date. The employer deducts the cost of the employee's future benefits from present income as a business expense. These plans usually provide three options:
- Premium Conversion Employee contributes a proportionate share of the family health care costs with pre-tax dollars.
- Medical Reimbursement Account Employee is able to use a SALARY REDUCTION PLAN to pay with dollars on a pre-tax basis for medical expenses not covered by insurance; a separate medical reimbursement account is established for each employee.
- Dependent Care Reimbursement Account Employee is able to use a salary reduction plan to pay with dollars on a pre-tax basis for dependent care expenses.
Popular Insurance Terms
Deferred annuity under which one premium payment is made and the annuity is paid up (no further premium payments are required). ...
Coverage for bodily injury, property damage or destruction, for which the insured garage and/or its representatives become legally liable resulting from the operation of the garage. For ...
Same as term Disability Benefit: income paid under a disability policy that is not covered under workers compensation benefits. It is usually expressed as a percentage of the insured's ...
Formal process of setting aside funds on a mathematical basis to provide deferred income benefits. ...
Specific values of securities computed annually by the national association of insurance commissioners (NAIC) as guidelines and procedures for insurance companies in listing of their ...
List of cash allowances for various types of surgeries. ...
Bodily or emotional injury resulting from physical or mental wound or shock. A traumatic injury is caused by something outside the person's body as opposed to a sickness or a disease. An ...
In a commercial general liability (comprehensive general liability) policy, exclusion of coverage for sold premises. The objective of this exclusion is to eliminate coverage for property ...
tort against another person's property, designed to detain or dispose of it in a wrongful manner. For example, wrongful selling of another person's automobile without permission would ...
Have a question or comment?
We're here to help.