Missouri has followed the lead of Massachusetts and a handful of other states in mandating that most employers establish a cafeteria plan through which their employees may pay their health insurance premiums on a “pre-tax” basis. This cafeteria plan mandate is just one aspect of the “Missouri Health Insurance Portability and Accountability Act” (or “Missouri HIPAA”), as enacted by the Legislature during its 2007 session.
The new mandate (found at Section 376.453 of the Missouri Revised Statutes) applies to any employer that provides insured health coverage to its employees and that pays any portion of the premium for that coverage. Self-funded plans are exempt from this requirement, as are (apparently) employers that require their employees to pay the full premium.
The cafeteria plan mandated under this Missouri statute must satisfy the requirements of Section 125 of the Internal Revenue Code. The plan need only offer a pre-tax premium option, however; there is no requirement that it offer flexible spending accounts or other optional cafeteria plan benefits.
This new law takes effect as of January 1, 2008. Thus, any Missouri employer offering insured health coverage to its employees – but not currently maintaining a cafeteria plan – will want to take immediate action to comply with this law. Employees should be informed of this pre-tax premium option as part of any upcoming open enrollment, and a plan document should be drafted and formally adopted before the January 1st deadline.