Compliance Office Hours: Section 125 Cafeteria Plans

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Compliance Office Hours: Section 125 Cafeteria Plans

Thursday, July 17, 2025

Newfront Compliance Office Hours - Section 125 Cafeteria Plans 7/17/25 from Newfront on Vimeo

Section 125 cafeteria plans provide the gateway to employee pre-tax contributions for health and welfare plan benefits and FSAs. Employers’ ability to offer pre-tax salary reduction contributions is the product of a complex system of cafeteria plan rules designed to avoid constructive receipt—a concept that most have never considered. The Section 125 irrevocable election, plan document, use-it-or-lose-it, and other key rules are very strict, and there is no correction program to prevent a potential full loss of tax-advantaged status upon plan operational failures.

This session of Newfront Office Hours covers the key Section 125 cafeteria plan rules that all employers should understand.

Click here to view the presentation slides.

Brian Gilmore

Lead Benefits Counsel, VP, Newfront

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