Premium Only Plan Overview

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 employees’ share of insurance premiums without negatively affecting their take home pay.

With a POP, employees:

  • do not pay FICA, federal, 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 their take home pay.