What is a Cafeteria Plan?
A cafeteria plan is an employee benefits plan which lets employees choose from a list of options, much like they might choose from a cafeteria menu. Hence the name, cafeteria plan. There are distinct advantages to cafeteria plans for both employees and employers, especially for small businesses.
Some common inclusions on the menu of a cafeteria plan are:
- Health Insurance
- Childcare Assistance
- Life Insurance
- Payments into Retirement Accounts
- Adoption Assistance
- Paid Leave
- Assistance with Care for Injured or Disabled Family Members
Depending on an employee’s needs, he or she can choose from these options to construct the ideal benefits package. For example, a woman who is planning on having children in the near future might choose to put payments toward paid maternity leave, health insurance, and child care.