What does the term “employee” mean under Code Section 125?
A. The term “employee” includes present and former employees of the employer. The term does not include self-employed individuals. Partners in a partnership would considered self-employed, and therefore, would also not be considered employees for purposes of Code Section 125. All employees who are treated as employed by a single employer under Code Section 414 (b), (c), or (m), are treated as employed by a single employer for purposes of Code Section 125. (Reg. Sec. 1.125-1 Q&A-4) Q.
