That Cafeteria Plan Offering

Sports and Insurance Talk During Post-Game Pizza

It was a late August evening.

Cole Hamels was pitching a Rangers win on the tv behind me, while the Dallas Cowboys were playing preseason football on the tv in front of me.

And, somehow my table full of 9 guys from the Dallas MSBL Cubs broke out in insurance talk.

Being the introvert that I am, I pretty much kept my mouth shut and my ears open as I listened.  The content was somewhat accurate and somewhat inaccurate stories of Obamacare and employer health plans.

And I’m so happy I just let them speak, because the great Jimmy decided to set the record straight as he uttered the soon to be famous insurance phrase “kitchen plan”.  “Well, you know.  We go above and beyond to offer a kitchen plan,”  Jimmy said with pride.   “Oh, a cafeteria plan?” I said.   “Yeah. That. You know what I meant.”

Though the terminology is pure awesome, even if slightly incorrect, the sentiment and message being delivered was 100% spot-on correct.

The cafeteria plan does go above and beyond, and does help enrich the lives of his employees.

Here’s why this is an above and beyond offering from the employer:

• They offer the plan because they want to help.

• The plan doesn’t satisfy any government mandate and in-fact becomes subject to slightly higher scrutiny because there is a plan offering. 

• The employer risks coming up on the losing end if employees access their flexible spending accounts (FSA) for more than they pay in  and then leave.

• The employer pays an administrator a small fee to pay out claims, provide a debit card and keep correct records for the IRS.

Here’s why this is a big benefit to employees:

• The ability to purchase the employee’s portion and any dependent’s coverage under the Section 125 Cafeteria plan is huge. Not only does it save money on taxes.  But, it’s automatic and the employee doesn’t even have to file any tax forms to receive the benefit.
• With the FSA portion of the cafeteria plan, the employee can have immediate access to their chosen annual benefit for qualified medical expenses, even if they haven’t paid in yet.
  
  

Why is Immediate access to the Medical FSA big?

• Imagine an employee who has back pain, but is putting off a medical visit because they can’t afford a $600 MRI right now.
• The delay is bad for the employee for obvious reasons, but the lesser productive employee is also bad for the company.  The ability to remove the barrier to care by the day one availability of money is huge.

Give Jimmy major props for two things:

1. Taking great care of his employees
2. Making us all smile as we roll out our “kitchen plan.”