PREMIUM-ONLY-PLANS (POP Plans)
A Premium-Only-Plan allows employees to pay for their share of the company-sponsored health insurance premiums with before-tax money. This reduces the cost of the employee share of premium by 25% or more (actual savings are based on the individual employee's tax bracket) and saves the employer FICA and Medicare taxes on these premium dollars.
To set up a Premium-Only-Plan you must first design the Plan, then prepare a Plan Document, Summary Plan Description and provide enrollment materials. All this must be completed prior to the start of your first Plan Year. Once the Plan is set up you must comply with all federal guidelines when operating the Plan and complete Discrimination Tests each year to show that key employees are not receiving a disproportionate share of the pre-tax benefits under the Plan.
Company Benefit can help. Simply, complete and return the attached Consulting along with a completed Implementation Questionnaire and payment for the first year's services. Once the contract, information and check are received we will contact by phone to verify all information, review your Plan Design (to ensure it is compliant with current regulations) and answer any questions you may have.
You may also expand your Premium-Only-Plan in the future to include pre-tax Child/Dependent Care and Out-of-Pocket Health Care Expenses. Call our consultants to review these options.
Cafeteria Benefit Plans / Flex Benefits
employer-sponsored programs that allow employees to use before-tax dollars to pay for many regular family expenses. The money which employees contribute to the Plan is not subject to Federal and State Withholding Taxes or Social Security and Medicare contributions. These payroll tax savings result in an increase in take-home pay for participating employees and a reduction in payroll taxes for the company. Tax-free expenses which can be paid through a Flexible Benefit Plan include:
- Child/Dependent care expenses necessary to employment
- ($5,000 maximum per family per year)
- Out-of pocket medical, dental, and vision expenses
- Employee-paid health, dental and vision insurance premiums
- Employee-paid disability insurance premiums
- Employee-paid term life insurance premiums up to $50,000 in death benefit.
After-tax choices may also be offered on a voluntary basis such as long-term care insurance, group auto, home owners and rental insurance and Pre-Paid Legal Services.