{"id":380,"date":"2019-05-29T08:14:32","date_gmt":"2019-05-29T08:14:32","guid":{"rendered":"http:\/\/cdhp.sourceitmarketing.com\/wordpress\/?p=380"},"modified":"2019-08-28T21:22:29","modified_gmt":"2019-08-28T21:22:29","slug":"back-to-basics-with-premium-only-plans-pops","status":"publish","type":"post","link":"https:\/\/www.flexiblebenefit.com\/cdhp\/back-to-basics-with-premium-only-plans-pops\/","title":{"rendered":"Back to Basics with Premium Only Plans (POPs)"},"content":{"rendered":"<p><fontsize=16px>The only way for an employer to provide certain benefits tax-free to its employees, such as health, dental or vision insurance, is through a Cafeteria Plan, as defined under Section 125 of the Internal Revenue Code. \u00a0The only way for an employer to have a Cafeteria Plan is by preparing a written plan document which meets the requirements of Code Section 125. \u00a0Failure to have a written document, or failure to operate a Cafeteria Plan in accordance with the terms of Code Section 125, disqualifies the plan as a Cafeteria Plan and results in gross income to the participants. \u00a0In other words, any participant in the plan will lose the tax favorable status of the benefits that he or she would have otherwise received.<\/p>\n<p>As a comparison, think about an employer who offers a tax-preferred retirement account, such as a 401(k). In order to have a 401(k), the employer must have a written plan document that explains information about the plan. \u00a0For example, who is eligible, when can contributions be changed, what happens after employment is terminated, can loans be taken from the plan, etc. \u00a0A similar, but different type of plan document is required when it comes to providing tax-free benefits for health, dental, vision, life, disability, and other qualified group insurance products.<\/p>\n<p>Please note that a Premium Only Plan (POP) can generally be defined as a type of Cafeteria Plan where the only pre-tax benefits available to participants are for those of insurance premiums. If the Cafeteria Plan also provides for other pre-tax benefits, such as a Health Care FSA or Dependent Care FSA, additional plan documents are required.<\/p>\n<p>Because Code Section 125 is complex, it generally requires a third party who is familiar with the tax code to prepare a plan document which meets the Cafeteria Plan requirements.<\/p>\n<p>The materials contained within this communication are provided for informational purposes only and do not constitute legal or tax advice.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The only way for an employer to provide certain benefits tax-free to its employees, such as health, dental or vision insurance, is through a Cafeteria Plan, as defined under Section 125 of the Internal Revenue Code.<\/p>\n","protected":false},"author":1,"featured_media":340,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-380","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - 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