Section 125 Premium Only Plan

The section 125 program is a tremendous opportunity for you to enhance your benefits package.

Section 125 premium only plan. Traditionally these pop plans have been used in combination with employer sponsored group health insurance plans. The section 125 premium only plan pop which is a very common type of cafeteria plan allows employers to offer benefits in accordance with section 125 of the internal revenue code hence the name. Irs code section 125 allows an employer to set up a premium only plan pop where an employee s insurance premium contributions can be deducted from his or her payroll on a pre tax basis.

It defines the term cafeteria plan and describes the types of benefits such a policy may include. This law outlines the rules employers must follow when establishing a cafeteria plan. The name section 125 plan pop derives from title 26 section 125 of the united states tax code.

A section 125 premium only plan pop is a cafeteria plan which allows employees to pay their health insurance premiums with tax free dollars. Start running payroll and benefits with gusto. The premium only plan is the building block of the section 125 plan.

Section 125 plans section 125 plans from paychex can save money for your company and employees. Under a section 125 program you may choose to pay for qualified benefit premiums before any taxes are deducted from employee paychecks.