MENLO PARK — A Section 125 Premium Only Plan (POP) is an essential part of any employer group health insurance and ancillary benefit program. Section 125 is a part of the Internal Revenue Code that legally allows employees to make their benefit contributions with pre-tax dollars. A Section 125 POP can benefit employers and their employees alike.
How Employers Benefit From a Section 125 POP 
A Section 125 POP can save an employer money in a couple of ways. First, it reduces the amount employers must match of their employees’ Social Security and Medicare Taxes. Additionally, it can lower an employer’s workers’ compensation premiums.
How Employees Benefit From a Section 125 POP 
Employees avoid paying any income tax on premiums they pay through POP. The premiums are actually deducted before the taxes are calculated. Keep in mind that employees are still subject to California state taxes. Additionally, an employee must have a legal document set up by their employer in order to have premiums taken out on a pre-tax basis.

Learn how small business owners can save money and manage costs through pre-tax premiums for employee health insurance groups.

Pre-Tax Premiums for Small Employer Health Groups by Bob Vinal

By Bob Vinal of {BR} Bay Area Health Insurance Marketing, Inc.

Pre-Tax Premiums for Small Employer Health Groups

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