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Full 125 Cafeteria Plan

Full 125 Cafeteria Plan

full 125 cafeteria planSection 125 of the IRS Code allows organizations to establish flexible spending accounts (FSAs) where employees can pay on a pre-tax basis for qualifying job related dependent care and uncovered medical expenses (e.g., co-pays, deductibles, etc.). A full 125 Cafeteria Plan requires not only plan documents and a summary plan description, but must be administered allowing only qualified expenses to be reimbursed. Most organizations use a third party administrator.

Under this program, employees anticipate qualified expenses at the beginning of the plan year, authorizing the employer to deduct set amounts per pay period. Employees submit evidence of qualifying expenses for reimbursement or use a debit card. Anticipated amounts are subject to a “use it or lose it” clause and cannot be altered mid-year unless a family status change occurs.

ERISA Solutions uses several highly qualified third party administrators for full 125 Cafeteria Plan setup and administration. Call or email for assistance getting setup with one of our providers, toll-free: (855) 447-3375 or



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