Do you have a Premium Only Plan in place?
A P.O.P. plan is part of the IRS code that allows employees to pay their portion of the premium with pre-tax dollars, allowing both employers and employees to profit. Employees can save 20–40% of their payroll deductions. The savings are on city, state, and federal income taxes, including Social Security and Medicare. Employers save the matching Social Security (6.20%) and Medicare (1.45%) taxes, which equates to 7.65% of all the dollars put through the plan, a substantial savings.
Plans that qualify for P.O.P. include the following non-taxable, employee-sponsored group plans:
- HSA Contributions
If your employees are paying with pre-tax dollars they must have an IRS qualified event to change or revoke any elections during the plan year.
Contact your benefit consultant with questions or for help getting your P.O.P plan set up.