Cafeteria plan is also called triple option plan; provides different health benefits plans and extra coverage options through an insure or third-party administrator.

Question

Options

• ATRUE
• BFALSE

• A
  83% (15)
• B
  17% (3)

Explanation

Option A is correct because a cafeteria plan, governed under Section 125 of the Internal Revenue Code, is indeed commonly referred to as a triple option plan due to the multiple benefit selections it offers employees - typically including different health plan types such as an HMO, PPO, and indemnity plan, along with additional coverage options administered through an insurer or third-party administrator. Option B is incorrect because it denies this established equivalence; the two terms describe the same flexible benefit structure and are used interchangeably in insurance and benefits contexts. The defining feature of this plan type is that employees can pick from a "menu" of pre-tax benefit options, which is precisely what both names reflect.

Memory tip: Think of a cafeteria where you choose from multiple food options - just as a cafeteria offers a variety of choices, a cafeteria (triple option) plan lets employees choose from multiple health and benefit options. The word "triple" reinforces that at least three distinct plan types are typically on the menu.

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