A Premium Only Plan (POP) provides a way for you to control the cost of employee benefits and enjoy substantial savings because plan premiums are converted from an after-tax expense to a pre-tax expense1.
A premium-only plan is a type of IRS Section 125 plan and sometimes referred to as a cafeteria plan, and offers tax advantages for both employers and employees.
A POP is an easy, convenient way to increase employee take-home pay and reduce company payroll taxes. Under a POP, a company’s taxable payroll can be reduced by the amount employees contribute to certain employer-sponsored group benefit plans, which can lower payroll-related taxes.
With a POP, employees’ taxable income can be reduced by the amount of their premium contributions, so employees pay less federal, FICA (Social Security and Medicare tax), and most state income taxes, which increases their take-home pay.
All Blue Shield group health plans can be provided on a POP basis and are offered to groups with one or more Blue Shield medical plans.
To learn more about how POP plans can benefit you, contact your broker or Blue Shield representative.
1 Employers and employees should consult with a financial advisor to determine if a Premium Only Plan is a good financial fit for them. Blue Shield does not offer tax advice.