A way to structure eligible benefits

A Section 125 cafeteria plan can allow eligible employees to choose between cash and certain qualified benefits. An appropriately established arrangement may allow eligible contributions to be made before some taxes. Tax advantages are conditional, not universal.

Review before implementing

  • Which benefits qualify under the proposed arrangement?
  • What written plan documents and administrative procedures are needed?
  • How do election periods and permitted midyear changes work?
  • What nondiscrimination testing or other ongoing requirements apply?

Coordinate with qualified advisors

HQINS can help start the benefits conversation. Your tax and legal advisors should review whether a cafeteria plan fits your business and how contributions and benefits may be taxed. Ask about provider responsibilities, fees and employer obligations before implementation.

Product and service references: Official Aflac source 1 ↗. Reviewed October 12, 2026. Confirm current policy documents with an advisor.