Which of the Following is Ineligible to Participate in a Section 125 Plan? [Answer Explained]

which of the following is ineligible to participate in a section 125 plan

When dealing with Section 125 Plans, it’s essential to grasp who qualifies for participation. These plans, commonly known as cafeteria plans, are designed specifically for employees within a company. Let’s delve into the specifics to answer the key question: which of the following is ineligible to participate in a Section 125 Plan?

Eligible Participants in a Section 125 Plan

Typically, Section 125 Plans are accessible to full-time and part-time employees. These individuals are usually eligible as they are considered part of the company’s workforce. While the eligibility criteria can differ based on the particular plan and company regulations, full-time and part-time employees generally qualify.

Important Considerations:

  • Full-time employees: Commonly eligible.
  • Part-time employees: Usually qualify, contingent on company guidelines.

Ineligible Participants

Nevertheless, not all individuals meet the eligibility requirements. Independent contractors and seasonal workers are generally excluded from these plans. Here’s why:

Independent Contractors

Independent contractors operate as self-employed individuals and are not bound to any single company as an employee. Because Section 125 Plans are designed for company employees, independent contractors do not qualify.

Seasonal Workers

Seasonal workers, employed temporarily to manage peak periods, typically do not meet the criteria for these plans. Their temporary employment status excludes them from eligibility under most Section 125 Plans.


In conclusion, the correct answer to which of the following is ineligible to participate in a Section 125 Plan? is:

  • c) Independent contractors
  • d) Seasonal workers

Understanding these eligibility guidelines helps both employers and employees recognize who can take advantage of Section 125 Plans. For precise details, always review the specific plan documents and company policies.