Flexible Benefit Plans

The Section 125 Premium Only Plan (POP) saves employers and employees money by reducing payroll taxes. Employees pay their portion of insurance premiums on a pre-tax basis rather than on an after-tax basis.

Benefits

IRS-sanctioned Premium Only Plans were created by the Revenue Act of 1978 and are governed by Internal Revenue Code Section 125. With a POP:

Eligibility

Regular corporations, partnerships, S corporations, limited liability companies (LLCs), sole proprietors, professional corporations, and not-for-profits can all save money on payroll taxes by establishing a Premium Only Plan. While regulations prohibit a sole proprietor, partner, members of an LLC (in most cases), or individuals owning more than 2% of an S corporation from participating in the POP, they may still sponsor a plan and benefit from the savings on payroll taxes.

Getting Started

You can start a Premium Only Plan at any time. Plus, you can have a short plan year for the first year so that future plan years coincide with either your fiscal year or the calendar year.

How it Works

Employers receive a self-administration and installation kit with document templates, step-by-step instructions, and informational videos for the employer and employees. Updates are provided annually with compliance monitoring.

Cost

$325 Start-up, $425 for annual compliance

Flexible Spending Account and Full Flex Plans
Available at a discount, quoted on a case by case basis.

Employee Benefits

 

Request more Info