Section 125 Cafeteria Plans

Sana plans are set up as Section 125 Cafeteria Plans. These plans offer many benefits for employers and employees, but also come with certain compliance requirements and setup considerations. Learn more!

What is a Section 125 Plan?

A Section 125 plan, also known as a Cafeteria Plan, provides participants an opportunity to receive certain benefits on a pre-tax basis.  

Our partners at Mineral (formerly ThinkHR) explain, “A cafeteria plan allows an employee to pay for certain benefits from gross pay, before federal income taxes, Social Security taxes, and, in most instances, state income taxes, are deducted. Employees save by reducing these payroll taxes. The employer saves because amounts paid through a cafeteria plan reduce the salary base used to calculate employment taxes.”

To ensure all Section 125 plans are IRS-compliant, employers must have the following on file:

  • Section 125 plan document provides information on which plans are available, rules for eligibility, and other required items outlined by the Employee Retirement Income Security Act (ERISA).  
  • Summary Plan Description (SPD) outlining what the plan provides and how it operates, including information on when an employee can begin to participate in the plan and how to file a claim for benefits. SPDs are automatically created for each employer and are available for members to view and download in the document center of their Sana account. 

Your Sana membership includes access to Mineral HR, where you can prepare and maintain the Section 125 Plan Document. You can watch this short video for more instructions. You should have already received an email with a link to register your account with Mineral HR.  If you have not received that, please let us know, and we will have a new invite sent to you.

Have questions? We've got you covered.