Lower Taxes with A Section 125 POP
IRS-sanctioned Premium Only Plan were created by the Revenue Act of 1978 and are governed by the Internal Revenue Code Section 125.
Although this code is now almost 35 years old there are still thousands of business owners and administrators who haven’t heard or aren’t aware of the significant tax efficiencies, and legal requirements to have a written plan document and sponsor a Section 125 POP plan to deduct employee paid premiums.
Using a POP, employees don’t have to pay FICA, Federal, and where applicable, state or local taxes on money used to purchase contributions to an eligible expense including contributions made to their Health Savings Accounts (HSA).
The result is a direct increase in employees take home pay for expenses they already incur. Although many employers don’t know about Section 125 other employers know they can establish premiums in their deductions tax-free but fail to realize there is an IRS requirement to have a written plan document. The document is required to stay current and there are legal requirements to distribute documents such as Summary Plan Descriptions(SPD) and either enroll employees or default enroll which requires the ability for an employee to opt-out if they desire.
If you don’t have a written plan document, or don’t know if it is current take the time to establish a plan with taxfreepremiums.com. It only takes a few minutes to create the document and be in compliance.