Accounting Question (Cafeteria Plans)

True or False

1. A cafeteria plan can provide employees and partners with a choice of participating in a Section 401(k), a health insurance arrangement or cash.

2. Former employees can participate in a cafeteria plan.

3. Sole proprietors can participate in a cafeteria plan.

4. A cafeteria plan provide employees with a choice of vacation pay or group term life insurance.

5. Salary reduction amounts that are exchanged for health benefits in a cafeteria plan are subject to income and employment taxes.