Reliable Payroll Premium Only Plan Page

What is a Section 125 plan?

Every year, Section 125 plans save employees and employers millions of dollars through pre-tax salary deductions to pay premiums for health insurance. One of the most utilized Section 125 Plans, is the premium-only plan or POP Plan. This plan allows employees to pay for their health insurance on a pre-tax basis.


All the IRS requires for an employer-sponsored group health and benefit plan to be eligible for this tax-advantaged treatment is that the employer have a simple “written plan document” administered and on file.


This POP Plan page is NOT intended to be used with a Health Savings Account. 

Health Savings Accounts(HSA)s are employee-owned medical savings accounts with premium tax-saving benefits.  

If client has an HSA plan with a Health Insurance company, please call The Pension Department for a POP plan with an HSA module.


The Internal Revenue Code prohibits a sole proprietor, partners, members of an LLC (in most cases), or individuals owning more than 2% of an S corporation from directly participating in the plan. 


© 2022 The Pension Department, Inc.

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