Q: SECTION 125 PLANS. HOW TO OPT OUT OF THE PLAN AFTER ENROLLING.
My employer offers the cafeteria 125 plan for AFLAC. I want to drop AFLAC but my employer said I cannot. I can only cancel them during open enrollment. They said the IRS will not allow it. I called the IRS and they said " due to budget constraints, they cannot answer or help me. What do I do.
A:
A Section 125 offers different options for employees. It allows employees to choose among medical, dental, vision, and other employee benefits, or they can receive the same amount in cash.
The Plan meets the specific requirements of Section 125 of the Internal Revenue Code of the IRS.
Note, the 125 plan does not provide health insurance.
In response to your question, employees are locked into their designated contributions for one year and they cannot change this option. At the end of the year, the Plan allows employees to become non-participating employees. The participating employees in Section 125 Plan receive benefits, as listed above, and the non-participating employee receives cash. The Plan is designed to make everyone happy.
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