QUESTION: Two years ago, I retired from my large multi-national employer who maintained a very beneficial “cafeteria plan”. Then, I started my own company. May I start a cafeteria plan for my small company?

ANSWER: Yes, the 2010 Health Care Act created a “simple cafeteria plan” for small businesses and provides a safe harbor from the nondiscrimination requirements for benefits including group term life insurance, self-insured medical expense reimbursement plan, and benefits under a dependent care assistance program.

Feel free to contact me if you or someone you know has this type of situation. Financial Planning and tax planning advice presented here is general in nature, and individual circumstances make applying these general rules tricky; thus, the above answer cannot be applied to all circumstances because the slightest variation could cause a different outcome.