Health Insurance Specialists - Section 125 Premium Only Plan (POP) or Tax-Free Premium Plan.

IRS Section 125 Premium Only Plan (POP)
sometimes called a "Tax-Free Premium Plan"

Lower taxes for Employees, and for the Employer, too
Businesses can tax-deduct Insurance premiums for their Employee Benefit plan. But an Employee's premium contribution (through payroll deduction) is taxable.

Section 125 of the IRS code solves this problem, by allowing premiums to be payroll-deducted BEFORE taxes are calculated. The tax savings includes:

•	Federal, State & FICA Taxes for the Employee
•	Matching FICA Taxes for the Employer

Employees save Federal, State & FICA taxes. Following is an example of an Employee earning $50,000 per year, whose Insurance premiums are $100 per month ($1,200 per year):


Annual Income	$50,000	$50,000
Pre-Tax Premium (Example - $100 monthly)		($1,200)
Taxable Income showing on your W-2	$50,000	$48,800
Tax estimated at 30% (Federal, State & FICA)	($15,000)	$14,640
After-Tax Premium (Example - $100 monthly)	($1,200)
Take-Home Pay	$33,800	$34,160

Employers save, too
Employers save the 7.65% matching FICA tax on payroll-deducted premiums. Following are two examples. The first is a small company, with annual payroll-deductions of $4,800 (4 employees at $100 per month each). The second is a larger business, with annual premium payroll-deductions of $15,000. The matching FICA tax savings to the EMPLOYER is as follows:


	Small Company	Larger Company
Payroll-deduction of Premiums (annual)	$4,800	$15,000
Employer's matching FICA tax	x .0765	x .0765
FICA Tax Savings to the Employer (annual)	$367.20	$1,147.50

Group Insurance premiums that qualify include:

•	Health Insurance
•	Dental Insurance
•	Vision Plans
•	Disability Insurance
•	Group Term Life Insurance (up to $50,000)

Cost for the Section 125 plan
Employees are charged no fees. The Employer pays a $350 annual fee, for:

•	Legal Documents
•	Customized Plan Document
•	Sample Corporate Resolution
•	Employee Communication
•	Presentation to Employees
•	Enrollment & Change Forms
•	Summary Plan Descriptions
•	Reporting & Disclosure
•	Discrimination Testing Explanation
•	Accountant-prepared IRS Form 5500 (if required)
•	Service & Assistance
•	Payroll Adjustment Instructions
•	Administrative Manual & Kit
•	Service to you & your Employees

Not just for big Employers
A Section 125 plan is easy to implement at any time, even mid-year. You can offer the same tax savings plan that large Employers offer.

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Section 125 of the IRS Code allows for other Cafeteria benefits, such as Flexible Spending Accounts and Health Reimbursement Accounts.