What is it?

The Premium Payment Plan (POP) is a non-discriminatory employee benefit program designed to take advantage of certain provisions of Section 125 of the Internal Revenue Code.  The plan helps you and your employees save money by converting insurance premiums from an after tax expense to a pre-tax expense.  Qualified, non-taxable insurance premiums and health plan dues that can be converted to pre-tax expenses include health, dental, vision, group term life (up to $50,000) and disability. As administrators of the POP program, GRR Enterprises, Inc. provides the Premium Only Plan Installation Kit.

POPs can be set up for any single employer or certain “related employer,” including members of a controlled group of corporations, members of a group or commonly controlled trades or businesses, or members of an affiliated service group. Certain individuals are prohibited from participating in POPs, such as sole proprietors and partners within a partnership, but their employee can participate.

What are the advantages?
The advantages of the plan are to save you and your employees money on taxes and other related employee expenses.

For the employer

• Helps recruit employees and keeps them satisfied;

• Reduces payroll-related taxes;

• In some states, saves on state unemployment insurance and worker’s compensation taxes;

• Cushions the blow of huge premium increases; and

• Requires minimal investment to implement.

For the employee

• Increases take-home pay;

• Reduces Federal income tax;

• Reduces Social Security tax; and

• Reduces state tax (except for New Jersey and Pennsylvania)