Both the employee and the employer benefit from a Premium Only Plan (POP). The employer has reduced payroll taxes because the employee's contribution is not considered part of taxable income. Employees receive a reduction in taxable income, thus decreasing taxes paid.
* Note: The IRS requires a formal Plan Document for all Section 125 Cafeteria Plans
If you have adopted a Premium Only Plan:
Your plan could be ineligible if the Nondiscrimination Test is performed improperly! Benefit Advantage will perform your annual Nondiscrimination Test for a fee.
* Note: If the employer is a Sub. Chapter S corporation, any 2% or greater owners of the corporation (or their dependent(s)) are not eligible to participate in any form of the Section 125 Cafeteria Plan.