Rhode Island, Connecticut, and Missouri recently followed Massachusetts in enacting a requirement that certain employers establish cafeteria plans under Section 125 of the Internal Revenue Code. 

Rhode Island enacted its law on June 27, 2007. The requirement under the new law is that employers with an average of more than 25 employees for six consecutive months of the year must adopt a cafeteria plan to permit employees to purchase health insurance for them and their dependents with pre-tax salary reductions. Employers are not required to contribute to the cost of health insurance purchased through the cafeteria plan. The requirement applies whether or not the employer offers group health plan coverage to its employees.

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