OTHER COMMON FRINGE BENEFITS (2 OF 4)
01.Core Concepts
Cafeteria Plans • Employee chooses cash or benefits • Benefits generally excluded from income • Avoids constructive receipt if: • Benefits are qualified • Plan does not favor HCEs • Nontaxable benefits to Key Employees < 25% of nontaxable benefits provided to all employees • Useful when benefit needs vary • Helps manage fringe benefit costs for the employer; show value of benefits