Can anyone shed some light on how the adoption assistance Section 127 works under a cafeteria plan. Is it a reimbursement type benefit? Help!

Excuse the wrong Code Section. I should be Code Section 137 for the Adoption Assistance question. Sorry!

Yes, you can include Adoption Assistance in a Section 125 Plan. It works like Dependent Care Assistance, the funds are available once they have been payroll deducted. However, the sponsor must be very clear to anyone who wishes to participate that it is, like all benefits under 125, subject to the "Use it or Lose it" rule, regardless of what the situation is, the expenses must be incurred during the plan year. So if the adoption was delayed and actually happened the following plan year, the participant would lose some or all of their money.