Funding Options
Cafeteria Plans can be funded by the employer, employee or both. Employer funding can be implemented through the use of Flex Credits, which an employee uses to purchase an insurance plan. Any remaining credits can be used towards a Flexible Spending Account, Dependent Care Spending Account or other benefit plan offered under a Cafeteria Plan.
If the employee needs to contribute more money to cover the cost of the insurance selected (i.e., for family coverage), they do so through voluntary pre-taxed salary reduction. Alternatively, the plan could be set up to be financed completely through payroll deduction.