Who is eligible to participate in a Section 125 plan?
Employees can be eligible to participate in a Section 125 plan if they work for an employer who has a plan in place. An employee would need to qualify by the employers requirements to be eligible. Companies from one employee, one thousand employees, or any size are all eligible for Section 125 plans.
Only employees of a sponsoring employer may participate in a Section 125 plan. Spouse and dependents may not participate directly in a flex plan, although the plan may provide benefits to them through underlying health or dependent day care program. Sole proprietors, partners owning 10% or more of the business and shareholders owning 2 percent or more of a Subchapter S corporation may not participate in a flex plan.
