Premium Only Plan (POP)

A Premium Only Plan (POP) allows employers and employees to maximize savings through pre-tax payroll deductions by converting the premiums employees pay for insurance to a pre-tax status.

With a POP, employers:

  • Lower their payroll taxes.
  • Taxable payroll is reduced by the total amount of employee contributions for benefits.
  • Allow employees to realize an increase in pay and take credit for a terrific new benefit, while still saving money.
  • Can increase your employees’ share of insurance premiums without negatively affecting their take home pay.

With a POP, employees:

  • Do not pay FICA, federal, or state or local taxes on money used to pay for their portion of employer-sponsored insurance premiums.
  • Defray the cost of insurance premiums with tax savings.
  • Increase employees’ take home pay.