Employers Required to Offer Employer Contribution for Section 125 POP
Recent guidance from the Department of Labor clarified that individual or personal plans not sponsored through an employer on a group plan basis are not eligible for Section 125 Plans as a tax-favored benefit. They have recently added additional guidance that affects group plans to fall close possible loopholes of employers offer group coverage on a non-contributory basis.
The DOL (Department of Labor) issued guidance that an employer who offers group coverage though an employer sponsored plan that is non-contributory so and employer offers insurance but fails to contribute to the plan typically violates the insurance contract the plan is written on. But now the DOL is stating that the employer MUST offer an employer contribution for the benefits to be eligible for tax favored treatment through an IRS Section 125 POP.