Premium Only Plan

 Advantages of the Plan
 Any employer can sponsor a Premium Only Plan
 Begin saving money on taxes any time
 Premium Only Plan Employer Annual Tax Savings Calculator
 Premium Only Plan Compliance Check list
 Start a Premium Only Plan
 Annual Compliance Service

The Premium Only Plan lets you cut payroll taxes without cutting your payroll.

A Premium Only Plan (POP) enables your employees to pay for their share of group insurance benefits with pre-tax dollars. Insured benefits include such items as, Group Health Insurance, Group Dental & Vision, Group Disability and/or Group Term Life. A POP Plan will increase your employees take home pay and save your company significant payroll tax dollars.

A POP is the most basic form of a Section 125 Plan. This program can be provided without changing your existing employee benefit plan. Employee deductions are handled through the payroll process. The premium payment to the insurance company remains the same.

Advantages of the Plan

• Employees don't pay FICA, Federal, State and Local (where applicable) taxes on money used to pay for their portion of employer-sponsored insurance premiums.
• A company does not pay FICA tax on the amount the employees contribute to a Premium Only Plan saving the company significant tax dollars.
• Employee tax savings help defray the cost of insurance premiums.
• Employees can increase their take-home pay.
• A company can increase the employee's share of insurance premiums without negatively affecting their net pay.
• If a company does not require employees to contribute to the cost of insurance and is considering doing so, a Section 125 Premium Only Plan enables them to do so with the least possible impact on employee take-home pay.

Any employer can sponsor a Premium Only Plan.

Regular Corporations, Partnerships, S Corporations, Limited Liability Corporations (LLC's), Sole Proprietors, Professional Corporations and Non-Profits can all save money on payroll taxes by establishing a Premium Only Plan.

Begin saving money on taxes any time

You can start a Premium Only Plan at any time. Plus, since short plan years are accepted, subsequent plan years can coincide with either your fiscal year or the calendar year. The choice is yours. In most cases your first-year tax savings with a plan will far exceed the price of plan installation.

To Start Saving Money with a Premium Only Plan Click Here.

If you already have a Premium Only Plan and wish to check compliance, click here

Employer Tax Savings Example

With a Premium Only Plan Employers don't pay payroll taxes on the amount employees contribute for group insurance benefits. Below is an example of what a company with 15 employees can save annually.

	Without POP	With POP
Payroll	$ 450,000	$ 450,000
Pre-tax Insurance Contributions	$0.00	$ -25,000
Taxable Payroll	$ 450,000	$ 425,000
FICA Taxes	$ 34,425	$ 32,512
Total Annual Employer Tax Savings		$1,913

To estimate what YOUR company can save please click here.

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Employee Tax Savings Example

Below is an example of what an employee can save annually with the Premium Only Plan.

	Without POP	With POP
Employee Salary	$ 30,000	$ 30,000
Pre-tax Insurance Contributions	$ 0.00	$ -1,656
Taxable Income	$ 30,000	$ 28,344
Estimated Annual Tax	$ 9,195	$ 8,687
Estimated Employee Tax Savings		$508

* For a business with 15 employees as illustrated above.
Annual pre-tax payroll deductions: Based on insurance premiums averaging $138 per month per employee.
Estimated taxes (30.65%): Based on an average 20% federal, 7.65% FICA, and 3% state tax rates.

Premium Only Plan Compliance Check list

If you already have a premium only Plan please review the following questions to see if your plan is in compliance.

Do you have a plan document?
Yes
No

If yes, when was the last time that your document was updated? If it has been more than 2 years your document does not reflect most recent IRS and Department of Labor changes. Your plan is not in compliance. Please click here to get your plan in compliance.

It is not legal to deduct group insurance contributions on a pre-tax basis without a Plan Document. Significant tax penalties can be levied for companies deducting such insurance contributions on a pre-tax basis absent of a valid Plan Document. Please click here to start a Premium Only Plan and to receive a Plan Document.

Are your employees given a copy of a Summary Plan Description?
Yes
No

Your plan is not in compliance and you can incur significant penalties. Click here to get your plan in compliance.

Do your employees complete annual enrollment forms?
Yes
No

So that your plan is in compliance, it is necessary that employees complete annual election forms. Please consultant your advisor or, click here to find out how BeneFlex ensures compliance in this area.

Is your plan tested annually for compliance to IRS guidelines?
Yes
No

Your plan may not be in compliance. Please consultant your advisor or click here to contact us.

Start a Premium Only Plan

Plan Installation Services

BeneFlex makes implementation of your Premium Only Plan easy. Just Contact Us and BeneFlex will do the rest. Our service includes:

• Plan Adoption Agreement
• Plan Document
• Summary Plan Description
• Corporate Resolution
• Enrollment Forms
• Instructions for your payroll company
• Payroll Stuffer for employees

Annual Compliance Service

With your plan is established, you will receive complete administrative support services from BeneFlex, Inc. Our annual compliance services include:

• Updated Plan Document, required for keeping your plan in compliances with IRS regulations changes.
• Annual Compliance Kit, including re-enrollment materials, signature ready plan documents, compliance testing forms and procedures.
• Free assistance with discrimination testing upon request.
• Our insightful Newsletter.