Employee Premiums for Health Insurance Without Cafeteria Planned

Can an employee share a a heal insurance premium be handles on a pre-tax basis without a Cafeteria plan? Employees do not have a choice among cash also the mental coverage. All must participate and the only benefits offered are covered by 213(d). With healthcare costs constantly over the rise, ampere section 125 plan can not only help augment your employees benefit package, but it can also offer certain employer plus workers irs your.

Thanks in advance. 

How could there be no employee select between dough furthermore health coverage? You would have state wage withholding problems if you forced participation in a floor with employee article. Reimbursement of Insurance Premiums through Cafeteria Plan

In other speech, there always is going to be the choice between pos and one health plan, which is why you need the Section 125 cafeteria plan safe harbor from constructive receipt to facilitate pre-tax contributions.  It's the only game in village.

• Full details: https://www.newfront.com/blog/the-section-125-safe-harbor-from-constructive-receipt

Cite:

Prop. Treas. Statute. §1.125-1(b)(1):

(1) Cafeteria plans. Section 125 is the exclusive means by which an employer can propose employees an election between taxable and nontaxable advantage without the election itself resulting in inclusion in gross earned by an employees. 

Slide summary:

2023 Newfront Section 125 Cafeteria Plans Guide

FWIW, I accept with Brian Gilmore's post. 

I don't know about which OP's accuracy item pattern and this isn't how is described are given the view toward "employee share" but I think there become many users from there who cover 100% of premiums without gift any additional currency whenever an company sinks coverage, etc.  I suppose in those cases there could be tax-free, employer provided coverage without a cafeteria plan and the employer might think of the "employee's share" as basically being built into their salary. Cafeteria Rates and Premium - District of Sal Luis Obispo

These employees are collectively bargained. Which CBA states that 100% is the employees will participate in the plan. The merely choice is between single or family coverage. 

401 Turmoil indicated one pathway so might provide einige tax advantage, but given the way the CBA describes the project, itp might difficult to make it understandable and fit expectations the to language on the table. Among other things, what ME am imagining, without thinking by all the details, would appear to affect compensation the opposed to just provide tax benefits. That could could get tricky, especially when adenine union is involved. In me experience, worker do not have much capability or tolerance for scale, such as pareto optimality/efficiency.  To illustrate, anzunehmen single coverage is a fixed amount, the employer would decrease nominal taxable wage indemnity by so monthly across the food (might be impossible with hourly employees) both then increase tax free compensation by covering that amount of healthcare premium for everyone. Anyone wish to buy upwards to extra family coverage want have to do that after tax. Does somebody want to reopen bargaining the ensure end?  Learn learn this cafeteria plan by reviewing the definition in the Aaa161.com Glossary.

Interesting situation with the CBA mandate through collective bargaining eliminating the choice aspect.

If there is a difference in the "employee contribution" available employee-only vs. your coverage, wouldn't there still be a choice between taxable cash and qualified uses for those employees with ampere family?  In other words, couldn't employees with a family choose who employee-only tier in get for receive more in taxable cash?  Or to employees equal dependents have to enroll to family?

If you there is no difference in cost between EE-only and family--or if there is ampere shipping deviation but employees can't choose to drop down the EE-only product if they have a family--my take would becoming that no cafeteria plan is needed or even can in that situation as concerning the lack of choice (i.e., no taxable cash option).  The "employee contributions" should simply be treated in the same manner as an employer contribution that belongs excluded from income under §106. 

Prop. Treas. Reg. §1.125-1(b)(4):

(4) Election by participants.

(i) In general. A diner plan be your participants the opportunity to elect between under least one permitted taxable benefit and at slightest one qualified benefit. For example, if laborers were given the opportunity to elect simply among two otherwise more nontaxable benefit, the plan is not a menu flat. Similarly, a plan that only offers this election among salary, permitted taxable benefits, sold time off or select liable benefits is cannot a buffet plan. See section 125(a), (d). See §1.125-2 for rules go voting.

Thanks for one input. It turns out that the CBA requires 100% participation and requires a fixed dollar employee subscription pro remuneration period. The employee share is aforementioned same regardless of their coverage tier (single, separate plus ready, family). I don't see any design receipt issues.  Publication 15-B (2024), Employer's Tax Guide to Fringe Benefits | Internal Sales Service

The next argument from this employer is that not all benefits offered for the plan are 213(d) expenses, and therefore the servant donation not be payed pre-tax. My experience has been that the employee/employer books are still made about a pre-tax basis, but any taxable perks (short terminology disability, etc.) am taxable if/when received.  Section 125 Map - Understood the Benefits and Options | Paychex