Practice Quiz

Health and Life Insurance

Category - Tax Issues

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Voluntary group life insurance plans, or those that are elected by and paid for by an employee, may be included in a cafeteria plan under IRS __________ of the tax code.
  1. Section 1035
  2. Section 1031
  3. Section 401k
  4. Section 125
Explanation
Answer: D - Voluntary group life insurance plans, or those that are elected by and paid for by an employee, may be included in a cafeteria plan under IRS Section 125 of the tax code. However, these plans may not be funded on a pre-tax basis. All such plans are paid for by the employee with premium dollars that have already been taxed.
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