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Corporate Cafeteria Plan What is a Cafeteria Plan? The Section 125 of the IRS code allows employee premium contributions, dependent childcare and reimbursable medical expenses to be a payroll pre-tax deduction. When can an employee make a Cafeteria Plan mid-year election change? When there is a change in the employment status of the employee or spouse. When there is a change in the marital status of the employee such as marriage, death of a spouse or divorce. The number of dependents change due to birth, death, adoption, age or student status. When there is a significant change in premiums or coverage options.