Premium Only Plan (IRS Section 125)
The Premium Only Plan (POP) offers employers and their employees great tax benefits. An employer can offer a tax-favored option to employees and at the same time lower the employer's payroll taxes. A POP plan doesn't really create new benefits. Instead, under IRS Section 125, it allows employees to pay any premium contributions for certain employee benefits with pre-tax dollars.
Groups can save their employees 15–40% of their premium contribution for their insurance benefits.
Groups can save their employees 15–40% of their premium contribution for their insurance benefits.
How It Works
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1. Tax Assistance: Allied provides all necessary tax documents* for group health plans or large ancillary groups. A small fee may apply.
2. Pre-Tax Deductions: Employees sign a pre-tax document, and their premium contributions are deducted before taxes, reducing taxable income. 3. Lower Payroll Taxes: With reduced pre-tax income, groups pay less in Social Security and Medicare taxes. State taxes may also decrease if POP plans are recognized. * Please note that no paperwork is to be returned to Allied National and any questions concerning the completion of this paperwork or administration of the plan should be addressed to the group’s accountant or tax attorney. Marketing Materials |
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