The Small Business Council of America (SBCA), the American Society of Pension Professional & Actuaries (ASPPA), the Small Business Legislative Council (SBLC) and the Employers Council on Flexible Compensation (ECFC) announced Wednesday that they had submitted comments to the Senate Committee on Small Business and Entrepreneurship that were in support of the Act.
The bill was introduced by Senator Olympia Snowe (R-Maine), and has been co-sponsored by Senators Kit Bond (R-Missouri) and Jeff Bingaman (D-New Mexico) (See Snowe Proposes SIMPLE Cafeteria Benefits Plan ).
“We applaud the efforts of Senators Snowe, Bingaman and Bond to enable the purchase of health insurance and other employee benefits by small business employees through a tax-qualified vehicle. The SIMPLE Cafeteria Plan will allow small businesses to offer the same health insurance and savings options currently available to employees of large companies and government agencies,” said Brian Graff, Executive Director/CEO of ASPPA, in a press release.
The SIMPLE Cafeteria Plan Act would amend the tax code so that owners of small businesses, including sole proprietors, partners and all S-corporation stockholders, could participate in a cafeteria plan if they work in the business. It would allow employees at such companies to be able to purchase employer-provided health insurance and other benefits with pre-tax dollars.
Because of technical tax provisions which prevent small business owners from participating in the plan, cafeteria plans are currently seldom offered by small businesses.