Premium Only Plans (POP)

Is your organization spending a lot each month to provide health care coverage for your employees? It may be time to consider a Premium Only Plan, or POP.

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How it Works

This option is a win-win solution for your business as well as for your employees. When you offer a POP, you pay less in payroll taxes and will pay the insurance premiums of your employees on a pre-tax basis. This solution benefits employees because their taxable income is lessened, resulting in less income tax that must be paid. Your company will also save on costly insurance premiums and benefit from lower costs for providing health care coverage.

The following benefit plan options can be paid pre-tax through a POP:

  • Health insurance
  • Dental insurance
  • Vision insurance
  • Health Savings Account contributions
  • Group term life*
  • Accidental death and dismemberment insurance
  • Cancer insurance*
  • Disability insurance*
*Plans limits may apply

Employer Savings

  Without POP With POP
Annual total premiums $600,000 $600,000
Annual pre-tax-deductions 0 $500,000
Taxable payroll deductions $600,000 $100,000
FICA taxes (7.65%) $45,900 $7,650

Total Employer Savings


Employee Savings

  Without POP With POP
Income $20,000 $20,000
Annual pre-tax-deductions 0 $2,000
Taxable income (30%) $20,000 $18,000
Estimated taxes $6,000 $5,400
Post-tax premium deductions $2,000 $0

Take-home pay increased


isolved Benefit Services POP Service Includes:

  • Plan implementation outline
  • Employee POP Q&A resource
  • Employee Salary Reduction Enrollment form
  • POP Summary Plan Description
  • POP Plan Document
  • Board of Directors Resolution
  • POP Plan Adoption Document

Benefits of a Premium Only Plan

  • Employees are able to pay health care premiums pre-tax, saving State, Federal and FICA taxes.
  • Pre-tax payment of health care premiums lowers taxable income, saving employers payroll taxes.

Client issues are just non-existent with isolved Benfit Services. Even if there is an issue, you guys just take care of it.
– Jeff Hoerle, Priority Health

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