Manage Your
Section 125
Premium Only Plan
The Premium Only Plan is regulated by Section 125 of the IRS tax code and allows employees to set aside pre-tax compensation toward health insurance premiums. HR Service, Inc. provides easy-to-use tools to manage your POP documentation and testing needs.
Simplify Premium Only Plan (POP) Documentation
ERISA eSOLUTIONS
ERISA eSOLUTIONS
WHITE GLOVE SERVICE
WHITE GLOVE SERVICES
NONDISCRIMINATION TESTING
NONDISCRIMINATION TEST
EASILY CREATE & UPDATE SECTION 125 POP DOCUMENTS
- Access and update your POP documents online whenever you need them. Our platfomr is available 365 days a year, 24 hours a day.
- We provide automatic updates and notifications for IRS changes that affect your your documentation requirements.
- Create, edit, and securely store your documentation all in one place.
- Never worry about hidden charges. Access to your POP documentation is included with the ERISA platform and White Glove service pricing.
- Our ERISA eSolutions platform and White Glove services ensure you meet all your benefits compliance requirements.
Complete All Your POP Requirements In One Place
3. Annual nondiscrimination testing
Employees who provide a POP are required to conduct nondiscrimination testing every year at the end of the plan year. This testing ensures your plan does not favor highly compensated employees (HCEs). Access our nondiscrimination testing calculator to keep up with this annual requirement.
PREMIUM ONLY PLAN FAQ
A POP allows employees to pay health insurance premiums on a pre-tax basis. Premiums for employer-sponsored health plans or individual policies are the only expenses covered by the POP plan (medical, dental, vision, accidental death, etc.). This is a useful option to reduce tax requirements for employers and employees. With this plan, employees determine the amount of pre-tax money they want withheld from their income for the plan year. Employers withhold the amount equally between the paychecks for the plan year.
Section 125 has rules about who can and cannot participate in a POP. Those who cannot participate must pay on an after-tax basis. People who cannot participate include:
- Owners of an S-Corporation who own more than 2%.
- Spouses, parents, children, and grandchildren of an S-Corporation owner who owns more than 2%.
- Partners in a Partnership.
- Sole Proprietors.
- Members of an LLC.
These types of corporations can still offer a POP to their employees, but the owners of these businesses cannot participate.
Plan documents show that you provide a POP and that it is compliant with federal requirements. You keep this document on file for your records, not for employee distribution.
The SPD provides a summary of the POP for plan participants and informs them of the pre-tax benefit available.
The plan documents need to be updated whenever there is a change in your plan or there is a change in the laws that govern Section 125 plans.
SPDs are required within 90 days of the plan start date and every 5 years if no changes are made.
Keep up with all your benefit compliance needs
Download our free Compliance Calendar to make sure you are meeting all your HR and benefits requirements.