POP ( Premium Only Plan)
Premium Only Plan, an employee benefit that can help both you and your employees reduce tax expenses by letting employees pay part of their health insurance premiums with pre-tax dollars.You and your employees pay less in taxes. With a POP, you can save money by lowering your tax expenses, and help your employees keep more money in their pockets.These Plans are for employers who do not want to offer a full Flexible Spending Account (FSA) Plan, but still want to offer a tax benefit for their eligible employees.
A POP is a Section 125 Cafeteria Plan that allows employer-sponsored premium payments to be paid by the employee on a pre-tax basis instead of after-tax. Coverage may include the following: Group Medical, Group Dental, Group Vision, Group Disability, Group Term Life.
Why offer a POP?
A POP provides a cost-effective alternative to satisfy an employer’s legal obligation when offering a pre-tax option for employer-sponsored benefits such as group insurance, or a Health Savings Account (HSA). However, it does not provide the same services and benefits as those available through a standard FlexSystem Flexible Spending Account (FSA).
Employer Benefits, Reduces payroll taxes (including Social Security and Medicare) for every dollar of employee contribution into the POP, employers save 7.65%. FICA taxes. Saves on the cost of administration: the tax savings gained often covers the entire cost of Plan administration.