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FREQUENTLY ASKED QUESTIONS

  • What is the difference between a full blown Section 125 Plan and a Section 125 Premium Only Plan?

  • A premium only plan contains limited language of the Section 125 Plan that only allows for eligible benefit premiums and HSA (health savings account) contributions to be withdrawn from payroll on a pre-tax basis.

    A full Section 125 Cafeteria Plan allows for FSA (Flexible Spending Accounts) and dependent child care to be deducted from payroll on a pre-tax basis for eligible out of pocket expenses, but also most commonly includes the Premium Only Plan language with the eligible benefit premiums.

  • How much does a Premium Only Plan cost?

  • Typically a plan document and necessary forms will cost anywhere from $100-$600 through an attorney or tax advisor. Many payroll providers charge set-up fees as much as $600 but once you have the document you will be required to update as new legislation is available. A Premium Only Plan will cost only $89 a year if you choose www.taxfreepremiums.com as your document provider, which includes all mandated updates.

  • What is included with your service?

  • As part of our service you are provided with:

    1. The Plan Document

    2. The Summary Plan Description

    3. Default Enrollment Notice Forms

    4. Non-discrimination Testing Software

    5. Compliance Updates – Any time there is a change to the law that requires your plan document to be changed, we will update the document online and let you know when it is ready for you to download and print your updated document.

  • Why should I renew annually with TaxFreePremiums.com?

  • As laws change, your Premium Only Plan will become out of date. When the laws change it will become necessary to update your document. Instead of worrying about tracking the law yourself, let TaxFreePremiums.com do it for you. When the laws change, we will update the document and let you know to download and print the updated the document.

  • When do you have to do the non-discrimination testing for a Premium Only Plan?

  • Every year when the plan year ends is the appropriate time to do the non-discrimination testing for the Premium Only Plan.

  • How do I setup an account?

  • To setup your account today go to: http://www.taxfreepremiums.com/main/signUpCompany. You will be able to create a username and password. On the next page you will enter the billing information for the annual fee. After the billing information, you will be asked a few questions about your benefits. After the additional information you will be able to download all of your documents and a checklist that will walk you through the implementation of the Premium Only Plan.

  • I am a CPA and have clients that need Premium Only Plans; do you have any programs where I can partner with TaxFreePremiums?

  • What benefit premiums are eligible with a Premium Only Plan?

  • The following benefit premiums may be deducted on a pre-tax basis:

    • Accident and health benefits (but not Archer medical savings accounts or long-term care insurance)

    • Dental and Vision insurance coverage

    • Group-term life insurance coverage

    • Health savings accounts, including distributions to pay long-term care services

  • Who cannot participate in a Premium Only Plan?

    • Owners of an S-Corporation owning more than 2% (and their spouse, parents, children, and grandchildren)

    • Partners in a partnership

    • Members of an LLC

  • Is there an additional fee for the Health Savings Account module?

  • No, the HSA module is included at no additional cost

  • What do I need to do once I have my plan documents?

  • Once you have your plan documents you need to keep them on file in the case of an audit. Also make sure to distribute the Summary Plan Description (SPD) to all employees. Once your account is setup with TaxFreePremiums.com you will be provided with a check list that walks you through step-by-step.

  • In what ways does an employer and employees save in taxes?

  • By lowering the employees’ taxable income, both the company and employee saves on the taxes paid. If you would like to calculate how much you or your company can save please go to www.taxfreepremiums.com/main/whyUse.

  • What if I have multiple entities or have a control group, can I put all under one?

  • Yes, you can have multiple entities on the premium only plan working as a control group. When you are setting up the plan documents there will be an area where you can fill in the adopting entities.

  • What if I have questions about administration is there an additional fee?

  • Your annual subscription allows you access to our team of specialists, we’re here waiting for your questions. We have ability to chat live on our site, e-mail or can call toll free at 1-855-447-3375.





Federally Mandated Forms

Federal law requires all employers to have a 125 Cafeteria Premium Only Plan (POP document) if offering tax free benefits to their employees.

We Help You Stay In Compliance

Many companies have a Section 125 POP plan document on file, but it is out of date. Our automated and real time updates make staying in compliance a breeze.

Legal Team Specialzing in ERISA

The legal team we use specializes in ERISA, providing you with confidence you will always have the most legally compliant Premium Only Plan (POP plan) documents available.

Easy, Timely Updates

Company specific changes are easily done by updating your profile online. Legislative updates are done automatically and we'll notify you by e-mail as they occur.