The Benefit that Saves More than it Costs

Give your employees the ability to pay for their portion of group health insurance premiums tax-free with a Premium Only Plan (POP). Employees can save up to 30% on the cost of their benefits by avoiding payroll taxes. Even better, POPs save employer taxes as well! You'll save FICA taxes on every dollar that employees contribute through payroll deductions. Employer savings typically exceed the cost of the plan.

Flex offers a stand-alone POP document for a one-time fee of $275.

Why Offer a Premium Only Plan?


According to Section 125 of the Internal Revenue Code, employers who want to provide tax-free benefits to their employees must first establish a Cafeteria Plan. To establish a Cafeteria Plan, employers must prepare a written plan document which meets the requirements of Code Section 125. Because Code Section 125 is complex, it generally requires a third party who is familiar with the tax code to prepare a plan document that will meet the Cafeteria Plan requirements.

Failure to have a written document, or failure to operate a Cafeteria Plan in accordance with the terms of Code Section 125, disqualifies the plan. Plan participants will lose the tax favorable status of the benefits and any deductions taken would be treated as gross income for the participants.



Who Can Establish a
Premium Only Plan?


Any employer can establish a POP! Qualified employers include corporation, S-corps, partnerships, LLCs, sole proprietors, professional corporations and non-for-profits. Related employers also qualify, including members of controlled groups or affiliated service groups.

Although business owners may sponsor a POP for their employees, some may not be eligible for tax savings through payroll deduction. Individuals who are not eligible include, sole proprietors, members of an LLC, partners and individuals owning more than 2% of an S-corp. This same rule applies to a spouse, children, parents and grandparents of a more than 2% shareholder in an S-corp.



Savings on Everyday Benefits


Premium Only Plans save employees money on the benefits they're already paying for, including:

  • Health
  • Prescription
  • Dental
  • Vision
  • Employee Group Term Life
  • Group Disability
  • Voluntary Benefits
  • HSA Funding

Premium Only Plans save employees money on the benefits they're already paying for, including:



Contact a Benefits Consultant

Getting Started is as Easy as 1, 2, 3!


Request a proposal



Complete an employer application



Schedule an implementation call




That's it! You're ready to go.


Let Flex show you how easy benefits can be


contact us to get started