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![]() Understanding Premium-Only Employee Benefit PlansPremium Only Plans (POP), sometimes referred to as Premium Conversion plans, convert the employee contribution for benefits from after tax contributions to pre-tax employer contributions. Premium-only contributions can apply to medical, dental, vision, life, long term care insurance and other benefits. The employer and employee saves on FICA/FUTA and the employee pays for their portion of their premium with before tax dollars. There is also a corresponding minor impact on the Social Security benefit paid at a later date. This is the most common form of Cafeteria Plan and is extremely simple to operate and establish. The employee should pay for their disability insurance with after tax dollars to optimize their disability benefits not through a POP. |
The big benefit? Employees can remove insurance premiums
from their pay BEFORE TAXES. Copyright © 2005-2010 Benefit Consulting Group. All Rights Reserved. HR Benefits | Site Map | Site design by Chicago Web Design. |