What Is A Section 125 Premium Only Plan?
The Revenue Act of 1978 created IRS sanctioned Premium Only Plans. The Section 125 Premium Only Plan (POP) saves the employer and the employee money by reducing payroll taxes.
A Premium Only Plan allows employees to make their contributions towards their benefits on a pre-tax basis. Examples of some eligible programs are:
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 Health Insurance
Dental Insurance
Disability Income Protection
Vision Care Insurance
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Employees don't pay FICA, Federal, or where applicable, state or local taxes on money used to pay for their portion of employer-sponsored insurance premiums.
The Premium Only Plan reduces the employers' taxable payroll by the total amount of employee contributions for benefits. Lower taxable payroll means lower payroll taxes!
Free Section 125 POP Plans
Broad Reach Benefits utilizes the services of a national CPA firm regarded as an expert in employee benefits to provide our clients with a free Section 125 Premium Only Plan. We cover the complete first year cost (setup and annual fee) for our clients.
- Adoption Agreement
- Plan Documents
- Summary Plan Description
- Complete instructions
- Payroll Stuffers for employees (materials in English and Spanish).
The second year there is a $250 annual renewal service fee. This is paid direct to the Premium Only Plan administrator and provides the following:
- Updates and plan documents to make sure you are in compliance
- Assistance with discrimination testing
- Complete administrative services
- Toll-free hotline to answer all questions.
Flexible Spending Accounts
