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The Premium Only Plan is the building block of the Section
125 Plan. It allows for certain employee paid group insurance
premiums to be paid with pre-tax dollars. The qualified premiums
are:
- Health
- Prescription
- Dental
- Vision
- Disability
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- Employee Group Term Life (up to $
50,000.00)
- Cancer
- Medicare Supplement
- Hospital Indemnity
- Accident
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Employee Savings
Employees can save 20 - 40% of their payroll deductions.
The savings are on city, state, and federal income taxes,
including Social Security and Medicare.
Employer Savings
Employers save the matching Social Security and Medicare
taxes, and sometimes Federal and State unemployment taxes.
Depending on the state, employers may also be eligible for
worker’s compensation savings.
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