Draft a Minnesota-Compliant Section 125 Cafeteria Plan — Without Guesswork.
Attorney-designed drafting system
Instant Word or PDF output
Always up-to-date with federal and Minnesota law
Why Not Just Use a TPA Template?
Most third-party administrator templates:
Are written for private employers (ERISA-based)
Include dozens of unnecessary options
Require manual editing
Do not address Minnesota Paid Family & Medical Leave
Do not control HSA/FSA interaction automatically
Do not provide redline update tracking
The Cafeteria Plan Generator was designed specifically for Minnesota public employers.
It includes only what you need — and automatically applies the correct rules based on your selections.
How It Works
Complete the Adoption Agreement
Enter employer details, select benefit components, and define plan rules. The system automatically applies the correct legal language based on your selections.
Preview & Download
All articles, cross-references, and definitions update automatically based on your selections. Download your generated cafeteria plan document in Word or PDF format
Get notified when the law changes.
Easily manage your plans – review redline changes and adopt amendments with a click.
Intelligent Compliance Controls
This service automatically:
Shows only the articles applicable to your selected benefit components
Adjusts definitions based on active FSA types
Renumbers sections and updates cross-references dynamically
Controls Grace Period vs Carryover language
Applies HSA eligibility protections
Includes HIPAA and COBRA only when required
FAQ
A Section 125 cafeteria plan allows eligible employees to pay certain benefit costs with pre-tax salary reductions. Federal law requires a written plan document for this arrangement to be valid.
IRS rules require a written plan document. Without one, pre-tax salary reductions may be invalid, resulting in payroll tax exposure for both the employer and employees.
You can choose to elect any combination of the following four plan options:
- Pre-Tax Premiums
- Health Flexible Spending Account (Health FSA)
- Health Savings Account (HSA)
- Dependent Care Account
- 401(k) cash or deferred elections
– Not available for public employers. - Group term life premiums
– Most Minnesota public employers cover a basic group‑term life benefit (commonly up to
$50,000) and let employees buy additional coverage with after‑tax dollars. Running
supplemental life premiums through a §125 plan is rarely used, because pre‑tax payment
makes the coverage “employer‑provided” under IRC §79, and any amount of coverage
over $50,000 still generates taxable imputed income, wiping out the perceived tax
advantage. - After tax insurance premiums
– There’s no reason to pay after tax premiums (including for group term life, dependent life,
AD&D, or critical illness policies) through a cafeteria plan. Putting them inside the plan
just limits the ability to make mid-year election changes and complicates
nondiscrimination testing. It’s cleaner to take these as ordinary after tax payroll deductions
outside the cafeteria plan, where you can change or stop them more easily and avoid extra
compliance paperwork. - Prepayment of post‑retirement group‑term life insurance
This would let employees use pre-tax pay now to buy life coverage that continues after they
retire; it’s rarely offered because the tax benefit is small, recordkeeping is complex, and
most group life insurers/administrators don’t support it. - Paid time off (PTO) buy/sell
Offering a PTO buy/sell feature through a cafeteria plan creates a lot of headache for very
little gain. To comply with IRS §125 rules, employees’ PTO cashout or purchase decisions
must be locked in before the plan year and can’t easily change midyear. This tends to
clash with how PTO is earned, used, or bargained in CBAs. You also must track complex
“use-it-or-lose-it” and valuation rules to be sure no one accidentally gets taxed or disqualified.
It adds layers of administration and audit risk for relatively small tax benefits. It’s simpler,
cleaner, and safer to handle PTO outside the cafeteria plan. - Adoption Assistance
Providing adoption assistance through the cafeteria plan is unnecessary, burdensome, and
risky. The employer can sponsor a standalone Internal Revenue Code §137
adoption assistance program that provides the same income tax exclusion. Offering it
through the cafeteria plan creates the risk of failing nondiscrimination testing if used by a
highly compensated or key employee, and it imposes unnecessary restrictions and rules on
the adopting parent.
This service has been developed and maintained by a Minnesota employee benefits attorney with extensive experience advising public employers. Because an attorney is not reviewing your particular situation, it is not legal advice.
Our step-by-step wizard walks you through setting up your plan in about 10 minutes. You’ll enter your employer information, choose your benefit options, configure plan rules, preview your document, and sign electronically. Once complete, you can download your plan as a PDF or Word document.
Yes. Every action — plan creation, edits, amendments, template updates, signatures, and document downloads — is recorded in your plan’s audit trail with timestamps. You can view your audit log from your dashboard, and download a full audit report suitable for review by your auditors or attorneys for compliance purposes.
We monitor federal and Minnesota state law that affects cafeteria plans. When changes require updates to your plan document, we release a template upgrade — a new version of the plan template with updated compliance language. You’ll receive an email notification, and can review the exact changes in a redlined version of your document directly from your dashboard. Template upgrades require an active Compliance Subscription.
Template patches are minor corrections we make to your document that don’t change any legal meaning — things like fixing a typo, correcting a numbering error, updating an inflation-adjusted dollar amount, or rewording a sentence for clarity. You’ll see exactly what changed and can accept the update with one click. No signature is needed, and patches are always free — they don’t require a Compliance Subscription.
There are three types of changes that can affect your plan document:
Template Upgrade — A new version of the plan template that includes updated compliance language due to changes in law or regulation. Requires review, re-endorsement, and an active Compliance Subscription.
Template Patch — A minor correction to the existing template (typos, dollar figure updates, clarifications) that doesn’t change the legal meaning. Always free, no signature needed.
Custom Plan Amendment — A change you make to your own active plan, such as adding or removing a benefit option, changing your plan year dates, or updating administrator information. Your previous version is automatically preserved as a historical record.
The Compliance Subscription is an annual subscription that gives you access to template upgrades when we release new amended plan document versions due to changes in law or regulation. It’s included automatically with our bundle membership, or you can purchase it separately at any time if you own a single plan membership. Template patches (minor fixes) are always free and don’t require a subscription.
Yes. You can edit your finalized plan at any time from your dashboard. If you’re making substantive changes(coverage options, timing rules, etc) to your plan content during an active plan year, the system will detect this and guide you through the proper amendment process – non-substantive changes do not require a re-endorsement. For plans that are not active (upcoming), any edits can be made freely without requiring re-endorsement.
Our compliance team is here for you for plan document support. Use the contact us link in the header or footer of the site.
View and/or download our User Instructional Guide for a detailed walkthrough of how to use our service.
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