Section 125 Plan
Did you know that employee contributions to group insurance premiums can be paid with pre-tax dollars? Did you also know that an employer saves the matching FICA contributions on these pre-tax funds?
All this is made possible by installing a "Premium Only Plan", P.O.P., for short, in accordance with IRS code Section 125. In an effort to help our clients cope with ever increasing benefits costs, we provide a complete P.O.P. installation and administration kit FREE of charge. This $630.00 value includes:
- IRS Approved Plan Document
- Sample Board Resolution
- Letter of Notification to D.O.L.
- Summary Plan Document for Each Employee
- Election and Status Change Forms
- Video Presentation Explaining the Program to Employees
- Published and Video Guidelines for Administration
- 800 Number Support Staff Access
This is an exclusive service offered by Business Insurance Underwriters in conjunction with the accounting firm of Mayer, Hoffman McCann.
Section 125 FAQ
Q. What is a Section 125 Plan?
A. Section 125 is a provision of the Internal Revenue Code that allows employees to pay their share of the cost of certain group insurance benefits, unreimbursed medical expenses, and dependent care expenses with pre-tax dollars. Under this provision, your paycheck is reduced by the amount you elect for the year. That money is removed from your salary structure before Federal Income, State Income, and Social Security taxes are calculated, and placed in a separate account. This results in lower taxable income, and higher take-home pay.
Q. How does a Premium Payment Account work?
A. A Premium Payment Account allows you to have your contributions toward certain group insurance benefits deducted automatically from your paycheck, before taxes are calculated.
Please call us at 1-800-435-6299 or email us at fsmith@biu-inc.com for more information