Location and Facilities optional 1.
Under the new law, SIMPLE Cafeteria Plans will be deemed to meet nondiscrimination requirements as long as the plan sponsor meets certain eligibility, participation, and minimum contribution requirements.
A Cafeteria Plan as provided for under Internal Revenue Code Section is an employer sponsored plan under which employees have the option of selecting benefits or cash. Employees can choose which tax free benefits fit their needs, or may instead elect to receive taxable cash payments in lieu of unselected benefits.
For example, under a Cafeteria Plan, employees may use salary reduction to pay their share of premiums for health insurance provided by their employer, with these payments made on a pre-tax basis.
Thus, a Cafeteria Plan provides tax savings to employee and employer alike by subtracting premiums from gross salary before federal income and Social Security taxes are calculated. A Cafeteria Plan must be established in writing; it may not discriminate in favor of highly compensated participants and it may not favor key employees.
In the past, these non-discrimination rules have discouraged small business owners from using Cafeteria Plans. Further, if the non-discrimination rules are violated the plan benefits provided to highly compensated or key employees must be taxed.
Because of the potential for taxation of benefits provided by the plan, small employers—who may be more likely than larger employers to have a higher percentage of highly compensated employers—have tended not to provide Cafeteria Plans to their employees. In sum, besides easing the administrative burden once faced by small businesses that sponsored a Cafeteria Plan, the Healthcare Reform package also provides a safe harbor to the discrimination requirements applicable to highly compensated and key employees.
A small employer is defined as one with an average of or fewer employees on business days during either of the two preceding years.
If the employer was not in existence during the prior year, the determination is based on the average number of employees who are reasonably expected to be employed on business days during the current year. Once the plan is established, the company will be deemed to meet the requirement even if it grows to employ more than people in subsequent years; this window has been established to encourage employers to continue hiring.
How does it work? A SIMPLE Cafeteria Plan allows employees to use pretax funds to pay their portion of the health, vision, dental, and other employer-sponsored welfare premiums. The rate of match for highly compensated employees cannot exceed the rate of match for non-highly compensated employees.
Who is an eligible employee? In order to meet nondiscrimination requirements, all non-excludable employees with at least 1, hours of service during the preceding plan year must be eligible to participate in a SIMPLE Cafeteria Plan. An employer may elect to exclude employees who have not attained age 21 before the end of the plan year, have less than one year of service as of any day during the plan year, are covered under a collective bargaining agreement, or are nonresident aliens.
A plan may provide for a shorter period of service requirement for employees who are younger, if desired. Each eligible employee must be able to elect any benefit available under the plan under the same terms and conditions as those applied to all other participants.
If an employer offers such a plan, the plan is deemed to pass discrimination testing.Business Plan for a Startup/Expanding Business The business plan consists of a narrative and several financial worksheets.
The narrative template is the body of the business plan. Looking at your business like an outsider is difficult for many small business owners.
But your investors, unless they are family or friends, are going to look at it objectively. This is one of the reasons you need a Business Plan capable of surviving intense scrutiny. Small Business Products. Business Books, Forms, and Online Applications. Share on Google Plus. Share on Facebook.
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Jan 29, · How to form an LLC Create a business plan. Once you’ve decided that an LLC is a good fit for your business, you should start by creating a business plan (although it is not required), so that you have a roadmap for what you’re going to do and how you’re going to do it/5(9).
JPO Real Estate, LLC 2 Introduction and Purpose The goal of this practicum project is to create a detailed business plan that will develop the basis for a new start up real estate investment company which I seek to launch upon.
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