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Section 125 - Premium Only Plan (POP) :
This innovative, optional benefit helps employees pay for their share of health premiums with pre-tax income. This results in less taxes paid by employees, lower payroll taxes and Workers' Compensation costs for the employer.
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Other POP Plan Advantages :
Pre-tax deduction allows employees to take home more money.
Employee tax savings make it easier for them to assume a larger share of the premium, or "buy up" to the benefit design of their choice.
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| Employee Savings |
Before POP Plan |
After POP Plan |
Employee Salary
Employee Premium Contribution
Taxable Salary
FICA at 7.65%
Workers Comp (Average 3%)
Total Payroll Cost |
$ 2000
0
$ 2000
153
60
$ 2213 |
$ 2000
150
$ 1851
141
55
$ 2196 |
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Employer Savings :
- Monthly per Employee Savings :
- Annual per Employee Savings :
- 1st year savings with 30 employees :
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$ 17
$ 204
$ 6120
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Pre-Tax Premiun Plans