Premium Only Plans (POP) | eflexPOP

Products & Services | POP

What’s an eflexPOP?

Section 125 of the Internal Revenue Code allows tax savings for employers and employees. These Section 125 plans, often called “cafeteria” or “flex” plans are one of the few employee benefits that offer advantages to both employers and employees.

The Premium Only Plan (POP) is the most common of all cafeteria plans.It’s most often used in conjunction with the other cafeteria plan types (e.g., Flexible Spending Account). In a POP, the employees’ portion of group health and other premiums is payroll deducted on a pre-tax basis, resulting in lower income taxes.

Below are examples of the premiums that can be deducted pre-tax. You can only deduct for employer-sponsored plans for which you pay at least a portion of the premium.

Group insurance premiums that you can pre-tax include:

  • Accident Insurance                   
  • Group Health Insurance
  • Cancer Insurance
  • HMO Insurance 
  • Dental Insurance                          
  • Intensive Care Insurance 
  • Disability Insurance*                     
  • Vision Insurance
  • Group Term Life Insurance**

*Disability Insurance benefits are taxable when premiums are placed pre-tax.

**Term life limit: up to $50,000 pre-tax on employee only; spouse/dependent life not available.

How Does it Work?

There’s no need to sign up and there’s no paperwork to fill out. The eligible group insurance premiums will be automatically deducted pre-tax unless you choose not to participate. If you don’t want to participate in this benefit, you’ll need to notify your HR Department.

 

 

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