The passage of the Patient Protection and Affordable Care Act (PPACA) allows small businesses to sponsor a SIMPLE cafeteria plan and avoid discrimination testing if during either of the preceding two years the business employed an average of 100 or fewer employees. Participating businesses that grow beyond 100 employees may continue to maintain the SIMPLE cafeteria plan until they have exceeded an average of 200 or more employees during a preceding year.
How does a SIMPLE plan differ from a Section 125 cafeteria plan?
The administration of a SIMPLE plan is very similar to that of a standard FSA, but a SIMPLE Plan requires an employer to make a Uniform Contribution to the plan for each employee (2% or more of the employee’s total compensation). This is true for employees even if they choose not to make salary reduction contributions to the plan.
Why choose a SIMPLE Plan?
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Current FSA clients and participants: Log in to your MyTASC account to submit a Service Request, or call 1-800-422-4661 for assistance.
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