The Section 125 Benefit Election or better known as the Cafeteria Plan. Each year, by signing your Cafeteria Plan form anytime between the months of October through December for the next plan year, which runs from January 1, through December 31 of the next year. This is a Mandatory procedure each year and an IRS benefit offered to you.
The Cafeteria Plan is designed to help you save money through pre-taxed dollars each month. By pre-taxing your monthly medical, dental, vision, cancer, and accident premiums, you could save approximately 25% during the year.
As a second part of the Cafeteria Plan, you can choose to participate with the Flexible Spending account for unreimbursed medical expenses.
The third part of the Cafeteria Plan is the Dependent Day Care reimbursement.