1-855-447-3375
Clientsupport@hrserviceinc.com

Premium Only Plans as a Strategy to Address Increasing Costs of Employer Sponsored Health Insurance

Created with Sketch.

Premium Only Plans as a Strategy to Address Increasing Costs of Employer Sponsored Health Insurance

Premium Only Plans as a Strategy to Address Increasing Costs of Employer Sponsored Health Insurance

Employer sponsored health insurance has become an increasingly important aspect in the American economy; insuring approximately 157 million individuals, it currently makes up the greatest number of insured Americans.  As economic pressures have forced business owners to cut costs and re-think their financial strategies, an increasing number of employers have sought ways to more effectively manage the health insurance they offer their employees.  With the average annual premium for employer offered health insurance rising steadily throughout the nation, the ability to gain the greatest health insurance benefits for the lowest cost has become increasingly important.  IRS section 125 premium only plans, or POPs, give businesses the opportunity to save swaths of capital in FICA taxes while offering their employees the chance to contribute to their premiums tax free.

The benefits POPs offer companies have grown parallel to the mounting prices of insurance premiums.  According to the Kaiser Family Foundation 2010 poll, the average annual premium for employer-sponsored health insurance is $5,049 for single coverage and $13,770 for family coverage, a notable 5% and 3% increase from 2009.  Businesses across the nation have shouldered the financial burden as insurance companies have increased the cost of benefits.  According to Jon R. Gabel, vice president for Health System Studies, Health Research and Education Trust  “For many years, insurance companies have under-priced their health plans to get a bigger share of the market.  But after three years of financial losses, health insurers are restoring their profitability through catch-up pricing”.  POPs, however, mitigate the increasing costs of health insurance by reducing employer pay roll tax liability.  Business owners utilizing POPs decrease their FICA taxes by 7.65% and dramatically curb the impact rising prices have on their finances.

Perhaps the greatest relevant body to be impacted by the recent increase in insurance prices is the American work force.  Kaisers 2010 poll determined that the average annual workers contribution toward health insurance premiums has increased by 147% in the last decade (increasing from $1,619 to $3,997).  As this increase has affected the most prominent body of insured Americans, it stands to reason that POPs represent the greatest money saving strategy currently available.  Not counting the potential savings in city, state, federal, social security and Medicare taxes, employees subscribing to POPs save 20-40% on their premium deduction.  The tax free nature of their contributions increases take home pay and renders even the bloated prices of health insurance all the more affordable.

Employers seeking to gain the benefits POPs offer should consider us at http://www.taxfreepremiums.com/WhyUse.aspx for the best Premium Only Plan services and information.

Tags: , , ,