Premium Only Plan (POP) Tax Savings
A Premium Only Plan ( POP ). is a simple, IRS-approved change in your payroll process that allows you to use pre-tax salary dollars to pay your employees’ share of benefit premiums. Any size employer can take advantage of this special provision of Section 125 of the IRS code.
As a result, both employers and employees profit. Employees reduce their taxable income, which lowers their taxes and increases their take-home pay. You cut your payroll taxes by decreasing your total taxable payroll. Everybody wins – and saves.
POP Employer Advantages
- Lower payroll taxes means more company funds can be used for other business needs
- Increased employee satisfaction
- Low pricing at $69 per year
- Simple and quick plan set-up
POP Employee Advantages
- More take-home pay
- Reduced taxes
- Tax savings pays for partial costs of premiums
Employer & Employee Tax Savings
How a POP Plan Works
- Any size employer can take advantage of a Premium Only Plan
- All you do is adjust your payroll process to deduct the employee portion of your group insurance premiums on a pre-tax basis instead of after-tax.
Types of Insurance Plans that Qualify
- Group Medical Insurance
- Group Dental Insurance
- Group Vision Insurance
- Accident Plans
- Short & Long-term disability plans (taxes may apply to claims)
- Group term life (up to $50,000 of coverage)
- Health Savings Account (HSA) Contributions
A POP can be established for any employee, including:
- Members of a controlled group of corporations
- Members of a group of commonly controlled trades or businesses
- Members of an affiliated service group
The IRS prohibits certain individuals from participating in a POP:
- Sole proprietors
- Partners within a partnership including LLC and LLP members
- Owners of an S corporation
Even though these individuals cannot participate in a Premium Only Plan personally, their businesses can still benefit from the tax advantages of setting up a POP. for their employees.
Complete the below form and start saving on taxes today! You’ll be taken to the online checkout (one-time fee of $69) area upon form completion..