I am a business owner, can I participate in The CHAMP Plan™?

Depending on the structure of your company, you might be able to participate in The CHAMP Plan™.

The most common forms of business are Sole Proprietorships, Partnerships, Corporations, S Corporations, and Limited Liability Companies (LLC).

Sole Proprietorship/Partnership - In general, most business owners are ineligible for participation in a Section 125 cafeteria plan (e.g., FSA, Commuter benefits) because these owners are considered self-employed individuals, rather than employees of the company. Only employees can participate in cafeteria plans.

Self Employed - Even though self-employed individuals cannot participate in a Section 125 plan, it is important to remember that partnerships, S-Corporations, LLCs and LLPs, can still sponsor a Section 125 plan for their employees.

S-Corp -The Internal Revenue Code treats such shareholders in the same manner as partners in a partnership for benefits purposes. The result is that more-than-2% of shareholders in an S Corp are considered self-employed and expressly excluded under the cafeteria plan regulations.

C-Corp - Shareholder owners of C Corporations are not considered to be self-employed individuals. Therefore, any shareholder owners who work as employees for a C Corporation can participate in Section 125 just like any other employee.

Limited Liability Companies/LLC Owners - Generally, most business owners are ineligible for participation in a Section 125 cafeteria plan (e.g., FSA, Commuter benefits) because these owners are considered self-employed individuals, rather than employees of the company. Only employees can participate in cafeteria plans.