ABSTRACT
Does your business offer a selection of health care coverage? If so, it may include a so-called cafeteria plan as a choice. A cafeteria plan allows each employee to be paid an amount specified by the employer, which can be applied toward health care expenses. How much of this amount to spend and how to spend it is up to each employee. The funds can go toward medical insurance or expenses, dental care, disability insurance, life insurance, and adult and child care. The amount spent on these expenses is not taxed as income. Any of the funds not spent on health care will be taxed as income.
