Question

Why might a “cafeteria plan” be popular for a workforce that has a wide range of ages?

Answer 1

A cafetaria plan is popular for a wide range of ages in a workforce because it is highly flexible and caters to differing life stages of employees.

• Since the plan allows the employee to decide the portion of pre-tax salary to be set aside to pay for health insurance, it is flexible and available to all age group depending on their expenses and income. (Benefits are on a pre tax basis)
• The out of pocket medical expenses are paid out on a pre tax basis with the option of flexible spending accounts (FSA's). (Atleast one taxable benefit)

• Dependent Care Assistance Plan (DCAP) FSA benefit allows for employees with children to pay for childcare or care of adult such as parents. This covers the dependent care for nearly all the employees as very young one may have dependent parents and others may have children or even both. (Atleast one qualified benefit)