Employers and their employees can save much on tax costs with the help of a Section 125 POP Plan. It doesn’t matter if there is only one or thousands of employees, Premium Only Plans can help businesses realize significant tax savings without reducing employee pay and benefits.

Unfortunately however, not many businesses are putting Section 125 POP plans to use. How come? It’s difficult to understand why this tax saving scheme thought of by the government which is supposed to increase the employees’ net pay and at the same time shore up more funds for a company’s operational needs would have few takers.

The truth is, not too many people know about Section 125 plans and the many benefits that can be had from implementing one. Aside from the limited information on POP plans, there’s also the notion that these plans are hard to implement and even harder to remain in compliance with.

Contrary to popular assumption however, an employer doesn’t have to jump hoops to sponsor a Section 125 POP. Nowadays, there are many service providers that may help with Section 125 POP Plan documents, both in starting a plan and staying in compliance, for an affordable fee.

Here are some of the basic requirements needed and the administrative procedures that an employer would have to accomplish to implement a Premium Only Plan:

1. The POP Plan Document.

The POP Plan document is the very foundation of the Section 125 plan. This is where the specifics of the plan are indicated including the plan coverage, the applicable plan year, eligibility, and procedures for election .

2. Summary Plan Description or SPD.

The law requires that all participants of the plan and their dependents should be apprised of all the pertinent details of the Section 125 POP. Such important information, like the claim filing procedures and the details on plan administration, are outlined in the SPD. A copy of this document should then be given to the participant within 90 days of participation; or within 120 days of eligibility for beneficiaries.

These procedures are in accordance with Section 104b of the Employee Retirement Income Securities Act of 1974 or ERISA, the regulation designed mainly to safeguard the rights of participants and dependents of employee benefit plans.

3. Compliance.

It is also important that the Document be updated if there are amendments to the legislation or changes in the original information submitted. For instance, if the company transfers to a new location, then a corresponding update in the Section 125 POP Plan document must be made to stay in compliance. Failure to meet the needed compliance requirements may result in the employer losing its tax-favored status.

Don’t miss out on the advantages that a Section 125 POP plan offers! Drop by our site and find out a reliable and cost-effective way of getting your POP Plan document ready and updated all the time.

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