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.

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How It Works:

1. Allied provides the required tax documents and assistance, free of charge, for an Allied group health plan or large ancillary group (26+).  For smaller ancillary groups, we'll provide the documents for a small charge (only $50 a year).
   
   
2. When an employee signs the pre-tax document, premium contribution amounts are automatically deducted from their salary before taxes are calculated, which lowers the income amount.
   
   
3. Once the pre-tax income is lowered, the group will contribute less to Social Security and Medicare payroll taxes. State taxes may also be lowered if the state recognizes POP plans.
   

 

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