Section §125 (Mini Cafeteria) Premium Only Plan (POP)
Employee Contribution – Non Taxable!
POP Premium Only Cafeteria Plan
If your employee’s (and dependent’s) are contributing to your group health plan, their contribution-deduction from their paycheck, for your companies group medical premiums can be tax deductible with a Premium Only Plan – (POP 125) Mini Cafeteria Plan. Internal Revenue Code (IRC) §125 * html .
- Lower taxable AGI – Adjusted Gross Income on the employee’s Tax Return #1040
- PLUS, the POP will lower the employER’s payroll taxes such as
The way it works, is that your company signs up for a POP plan, with an authorized administrator – vendor, see the links below and on the sides, it’s often the same Insurance Company that your medical coverage is through, but it doesn’t have to be. The cost of the 125 plan is in the neighborhood of $135/year. The administrator-vendor sends you a kit and you distribute the forms and have each employee enroll. The forms do not have to be filed with the government or even the administrator. You just keep them on file in your company records.
The premiums you as the employer is paying for Medical Coverage are already tax deductible for your company is not reportable as income to the employees under Internal Revenue Code §106. The POP plan, allows the portion of the premium that the employee is paying to also be tax deductible, above the line as it lowers Adjusted Gross Income.
See below and the brochures in the margins for more information. Email us for any questions. Send us or enter your census for Group Health Insurance Quotes
To start your companies POP Plan,
Just review the brochures, below, complete the application and return to us, [email protected] . The administrative process and fees (around $150/year) are nominal. It’s a WIN/WIN for both employER, employee and the dependents.
ACA/Obamacare HCR (Health Care Reform) IRC §125 (f) (3) narrows the definition of qualified benefit to exclude Individual Coverage offered through – Covered CA. Notice 2013-54 cuts off employer reimbursement outside of exchange too. Check with us, there might be updates on this.
Health Insurance unfortunately is very complicated
President Trump February 27, 2017
- Thus, if we haven't simplified and explained in PLAIN ENGLISH what you are looking for:
- Section 125 POP PDF Document by CoreDocuments.com VIDEO
- What is Section 125?
- Do I need a Section 125 Plan Document for my business?
- How well do free ‘fill-in’ plan document templates work?
- How much do employees save?
- Does a plan bring the employer any tax breaks?
- Who can participate?
- What is a “cafeteria plan”?
- Can I add a health FSA, dependent care FSA, or Health Savings Account?
- Do I have to start a Section 125 plan on January 1?
- What comes with a comprehensive plan document package?
- How do I set up a new Section 125 plan?
- When does a plan document need to be updated?
- How do I order a Core 125 Plan Document package customized for my benefit plan?
- Is there a video on Section 125 plans?
- Where can I find additional resources?
EDD California 2024 Employers Guide #DE44
- Forms & Publications EDD
- FORMS REQUIRED TO GIVE NEW EMPLOYEES
- More workplace protections in 2022 New laws will shield employee health, safety and wages, but some ‘job killer’ bills were axed Los Angeles Times
- Social Security Forms
New Federal Reporting Requirement for Beneficial Ownership Information (BOI)
Effective January 1, 2024, many companies in the United States must report information about their beneficial owners—the individuals who ultimately own or control the company—to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury.
In 2021, Congress enacted the bipartisan Corporate Transparency Act to curb illicit finance. This law requires many companies doing business in the United States to report information about who ultimately owns or controls them.
Your company may need to report information about its beneficial owners if it is:
- 1. a corporation, a limited liability company (LLC), or was otherwise created in the United States by filing a document with a secretary of state or any similar office under the law of a state or Indian tribe; or
- 2. a foreign company and was registered to do business in any U.S. state or Indian tribe by such a filing.
FinCEN’s Small Entity Compliance Guide includes checklists for each of the 23 exemptions that may help determine whether your company qualifies for an exemption.
Links & Reference Material
- ACA Requirement to report value of Health Coverage on W 2
- EDD Taxability of Employee Benefits DE 231 EB
- Our webpage on Management Carve Outs
I’m doing research on using 125 plans for employees who purchase individual insurance, and found your website very helpful, so I thought I would share the following legal analysis of mine, which might be helpful to others:
Mark A. Hall, J.D.
Professor of Law and Public Health
Wake Forest University faculty/profile
- Fringe Benefit Overview
- Cafeteria Plans
- Simple Cafeteria Plans for Small Businesses POP Plans?
- Accident and Health Benefits
- Accident or health plan.
- Group-Term Life Insurance Coverage
- Health Savings Accounts
- Avalara Tax Compliance Guide for Business 2022 151 pages