I wouldn’t say that as soon as you have choice, it’s considered a cafeteria plan. For instance, if you include voluntary benefits, or if the plan does not have 100% participation requirement, you still have a choice to elect benefits, but that does not make it a cafeteria plan.
In Canada, cafeteria plans are plans where there are different levels offered for the same benefit that an employee can choose from. So there could be 2-3 options for life, 2-3 options for Health, 2-3 options for Dental, and the employee evaluates their needs and chooses the options for each benefit that suits them best. Most of the time, the employer provides “flexible credits” which is basically another way of saying the employer contribution.
From the readings I understand that it’s similar in the US (though the list of eligible benefits is quite larger than what is offered here in Canada as far as I know)
Basically you’ll see cafeteria plans for larger employers, or groups, since you need to have more people in your group to mitigate the impact of anti-selection by introducing choice.
I hope that answers your question. Anyone else that wants to elaborate more (or completely disagrees with me), please feel free to add to my response!