cafeteria plan

Definition

A benefits program allowing employees to choose from various options like a cafeteria line, allocating dollars across health insurance, retirement, and other perks. Provides choice while ensuring everyone complains about different things.

Example Usage

Our cafeteria plan gives me flex credits to spend on benefits, which sounds empowering until you realize the credits don't cover the actual cost of decent health insurance.

Origin

Authorized by Section 125 of the IRS code in 1978, allowing pre-tax benefit elections

Fun Fact

Cafeteria plans are called such because you select benefits like choosing items from a cafeteria, though unlike actual cafeterias, the dessert options (extra vacation) are usually unaffordable.

Source: Employee benefits and IRS tax code terminology

Related Terms

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wrongdoing

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