Premium Only Plan (POP)

Premium Only Plan Administration (POP) allows you to cut your payroll taxes without reducing your payroll!

The Section 125 Premium Only Plan (POP) saves you and your employees’ money by reducing payroll taxes. Once you have implemented a POP Plan your employees pay their portion of insurance premiums with pre-tax dollars rather than after tax dollars. The Employers taxable payroll is reduced by the total amount of the employee contributions for benefits in the POP Plan. This reduction in taxable payroll reduces the amount of FICA tax the employer pays.

  • Once implemented, a POP Plan allows employees to pay their portion of insurance premiums with pre-tax rather than after-tax dollars.
  • The employer’s taxable payroll is reduced by the total amount of employee contributions for benefits in the POP Plan, reducing the amount of FICA tax the employer pays.
  • Employees don’t pay FICA, federal or state and local taxes (if applicable) on money used to pay premiums through a POP Plan.
  • Participation will increase an employee’s take-home pay.

ABA will generate your Plan document, Summary Plan Description and make sure your Plan remains compliant with applicable laws.

If you would like to explore our services and what we can offer contact us today at sales@americanbenefitadministrators.com.

“ I can’t thank you enough for working on this and getting it done so quickly! I know you have (plenty of) other things going on, so I seriously appreciate this!  ”
Senior Benefits Specialist PEO