A cafeteria plan under Section 125 of the Internal Revenue Code (IRC) is a plan where:
All participants are employees, and
Participants can choose from a menu of two or more cash or qualified benefits.
NOTE: The 1984 Amendments (P.L. 98-369) introduced and used the term “statutory nontaxable benefits”, instead of qualified
benefits. The 1986 Reform Act (P.L. 99-514) substituted the current “qualified benefits” for statutory nontaxable benefits.