What is a cafeteria plan for health insurance? A cafeteria plan is a type of employee health insurance benefit plan offered in the United States.
Its name is derived from the fact that these plans allow employees to choose from different types of health benefits, similar to a customer choosing items to eat in a cafeteria. You can pick and choose what you want to insure and subsequently what you want to pay for with your limited health insurance funds.
Features Of A Cafeteria Plan
Cafeteria plans can offer employees such benefits such as health insurance, group life insurance, flexible spending accounts, and more. Some plans (although less now than there used to be) still offer an explicit choice between cash and benefits. This meaning if you want to opt out of getting health insurance, the employer will pay you a dollar amount equivalent to the cost of insurance.