Can a Cafeteria Plan be used to pay the premiums for a group of individual health insurance policies, or must that benefit be a group health insurance policy sponsored by the employer?
A. The IRS has recently verbally confirmed that individual policies can be paid for through a Cafeteria Plan. The new FSA rules prevent a participant from being reimbursed for other health coverage under the health FSA, but this rule does not prevent premiums for current health plan coverage from being paid on a salary reduction basis through the ordinary operation of the Cafeteria Plan. (Reg. 1.125-2 Q&A-7) Q.
Related Questions
- Can a Cafeteria Plan be used to pay the premiums for a group of individual health insurance policies, or must that benefit be a group health insurance policy sponsored by the employer?
- Can an employer purchase direct pay policies (individual) for their employees rather than a group policy?
- Is there an advantage to having group health insurance plan over an individual insurance plan?
