Glossary · Accounts and tax
What is a cafeteria plan?
A cafeteria plan is a written employer plan under Section 125 of the Internal Revenue Code that lets participants receive certain benefits on a pre-tax basis. Participants must be able to choose among at least one taxable benefit, such as cash, and one qualified benefit.
Definition and figures from HealthCare.gov glossary, IRS Publication 969 (2025), checked October 23, 2026. This page explains the term; it does not recommend a plan.
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Cafeteria plan: the facts
| Item | Fact | Source |
|---|---|---|
| Legal basis | Internal Revenue Code Section 125 | HealthCare.gov glossary: Cafeteria plan |
| FSA salary reductions under Section 125(i) (2025) | Up to $3,300 | IRS Publication 969 (2025): HSAs and other tax-favored health plans |
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What does cafeteria plan mean in health insurance?
A cafeteria plan is a written employer plan under Section 125 of the Internal Revenue Code that lets participants receive certain benefits on a pre-tax basis. Participants must be able to choose among at least one taxable benefit, such as cash, and one qualified benefit.