Which of the following is a requirement resulting from Section 125 and/or DEFRA?

Question

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Section 125 requires that any unused amounts in a flexible benefit plan at the end of the plan year or grace period must be forfeited by the employee. This is known as the "use-it-or-lose-it" rule.

Answer: B
 Section 125 allows for certain benefits to be provided on a tax-free basis, including health insurance premiums, flexible spending accounts, and dependent care assistance.

Answer: C
 Section 125 allows for employee benefits elections to be either revocable or irrevocable. If the election is revocable, the employee may change their election during the plan year, subject to certain restrictions.

Answer: D
 There is no requirement under Section 125 or DEFRA regarding employee eligibility under a flexible benefit plan. The employer may set their own eligibility requirements, as long as they do not discriminate against certain employees or employee groups.

Which of the Following Is a Requirement Resulting from Section