Question

"Which of the following is INELIGIBLE to participate in a Section 125 Plan?"

a) Full-time employees

b) Seasonal employees

c) Self-employed individuals

d) Independent contractors

Answer 1

Self-employed individuals and independent contractors are ineligible to participate in a Section 125 Plan, while full-time employees and seasonal employees can participate.

Step-by-step explanation:

Among the options provided, the ineligible individuals to participate in a Section 125 Plan are self-employed individuals and independent contractors.

The Section 125 Plan, also known as a Cafeteria Plan, is an employer-sponsored benefit plan that allows employees to choose from various benefits on a pre-tax basis, such as health insurance and flexible spending accounts.

Full-time employees, seasonal employees, and other eligible employees can participate in the Section 125 Plan.

For example, a college student doing an unpaid summer internship (c) would be eligible to participate if they meet the employer's criteria for plan eligibility.