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A Premium Only Plans (POPs) allows employees to make pre-tax contributions towards their benefit premiums.  These plans allow employees to leverage their money by avoiding the taxes for the elected amounts (in most cases, 30-40% savings).

Most companies take advantage of pre-tax payroll deductions for employee premium contributions.  But we see many compliance problems with this simple plan.  If you are audited by the Department of Labor or the Internal Revenue Service and are not compliant with the Section 125 regulations, you could lose your “qualified” status, be fined, and required to make corrections to all of the prior pre-tax payroll deductions.

For mo
re information, please contact Bridgeport Benefit Advisors.

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The material on this page is intended as general descriptions of the concepts presented.  It is for educational purposes only and it not intended to provide specific financial or tax advice.  These descriptions cannot take into account your specific conditions and situation including the data required for underwriting purposes, financial circumstances, risk tolerance, and other factors.