Premium Only Plans (POP Kits)
What is a POP Kit?
It is a Flexible Benefit Program that enables employers to allow their employees to pay their share of health premiums with pre-tax dollars. Pop plans are often referred to as premium only cafeteria plans.
What types of health premiums may be put in a POP Plan?
- Medical
- Dental
- Cancer
- Group Term Life
- A D & D (Accidental, Death & Dismemberment)
- Disability (If premium is taken pre-tax, benefit is taxable)
Who needs a POP Plan?
- Employers who want to do cost shifting because of rising health cost
- Employers who want to save on payroll taxes
- Employers who want to give their employees a benefit that will save them taxes
Who may not participate in a POP Plan?
- Partners in a partnership
- 2% Shareholders in a sub chapter s corporation, including relatives through the attribution rules, such as a spouse, child or parent
- Sole Proprietors
- Partners or Proprietors in a LLC or PLLC treated as a partnership or proprietorship
What services are required for a POP Plan?
- Written Plan Document & Summary
- Plan Description
- Annual Discrimination Testing
- Enrollment Forms
- Federal Updates
- Annual 5500 (Tax Return), when applicable
- Annual 5500 (Tax Return), when applicable