To control the costs of health care ,? employers use medical expenses or reimbursement of tax benefits accounts. In fact, these types of health plans based on the accounts are on the rise . As companies evaluate using a health reimbursement account, health savings account or health care reimbursement scheme, the two terms are often thrown around - a plan Section 105 and Section 125 cafeteria plan " 
is there a difference between a plane of section 105 and section 125? Yes. What is the difference? Read More
Note. - the subject was asked about our recent webinar, Can Tax-Premium Free Money work for you If you want to download the webinar and slides on demand? here.
section 125 cafeteria Plan
most people are familiar with a cafeteria plan section 125. Maybe you do not know by name, but if you've got health insurance through work, you've probably used one.
A cafeteria plan (see Article 125 of the IRS code ) is a service provided by an employer that allows an employee to contribute a certain amount of its gross income to an "account" designated before taxes are calculated. The "account" may be used to reimburse the employee for certain types of insurance premiums, medical, or dependent care expenses throughout the year or claim the plan period the employee agrees eligible expenses.
This is called a cafeteria plan because, like choosing a menu, an employer may provide a selection of benefits from which employees may choose.
Related: How to Section 125 Work cafeteria plans
Common examples of Section 125 cafeteria plans include:
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Contributions to a health savings account (HSA)
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health flexible spending accounts (FSA)
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Premium only maps (POPs)
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flexible spending Accounts dependent care
to summarize, under Article 125 of the code of the IRS, a cafeteria plan provides a way for employees to pay for eligible contributions to insurance premiums and medical spending accounts with pre-tax dollars.
Section 105 plan
then there is Section 105 plans. Section 105 plans are named after the tax code ( IRC Section 105 ) that allows for tax-free reimbursement for the costs of medical care as defined in section 213 (d), including reimbursement for individual spending Medicare.
Section 105 plans are employer-funded and are used in a variety of ways. For example, common examples of Section 105 plans include:
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self-funded (self-insured) Health Plans
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health reimbursement accounts (HRA)
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health reimbursement plans (HRPS)
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medical reimbursement Plan (MERP)
to summarize, section 105 plans offer a way for employers provide employees a tax refund qualified medical and health insurance costs
Conclusion
section 125 cafeteria and Section 105 plans are similar. they are both tools employers use to allow pretax contributions to medical expenses and health insurance. However, there are also important differences in the structure, funding and qualified health expenses.
Do you have any additional questions about the difference between section 125 and section 105 plans? Leave a question below. We would be happy to respond.
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