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.
The Rhode Island law takes effect immediately, but does not require employers to establish a cafeteria plan until July 1, 2009.
Click here for the regulations.
Connecticut law requires any employer that provides health insurance benefits paid at least in part through payroll deduction to give employees the opportunity to have their contributions excluded from their gross income by providing for salary reductions under a cafeteria plan. The law does not include a threshold number of employees but applies only when the employer provides health insurance benefits to its employees.
The new Connecticut law was signed on July 10, 2007 and is effective October 1, 2007.
Click here for the regulations.
Missouri’s Cafeteria Plan Mandate requires employers that provide health insurance coverage for which the employer pays some portion of the premium to establish a premium-only cafeteria plan. It does not apply to plan sponsors of self-insured plans.
The Missouri law was signed on June 1, 2007, and takes effect January 1, 2008.
Click here for the regulations.
