What is a Section 125 POP plan?

A Section 125 premium-only-plan (POP), is a cafeteria plan which allows employees to pay their health insurance premiums with tax-free dollars. Traditionally, POP plans have been used in combination with employer-sponsored group health insurance plans.

What does Pop mean on Paystub?

Premium Only Plan (POP) A POP allows you and your employees to pay insurance premiums with pre-tax dollars.

What is Section 125 on my w2?

SEC 125 is your employer’s benefit plan. It is also known as a “cafeteria plan”. Usually, what is reported there is your medical insurance premiums that are paid with pre-tax income. They are not taxed and are not included in your W-2 Box 1 wages so you can not deduct them as medical expenses. 2.

What is Ezpop?

If your employees pay for insurance through payroll deduction, the EZPOP (Premium Only Plan) is an easy way to save taxes. You, the employer, also save about 7.65% (the FICA match) on every dollar your employees deduct.

What is a premium conversion plan?

Premium conversion reduces an employee’s taxable income by the amount of his or her health insurance premium. As a result, the employee pays less tax.

What does Pop mean in insurance?

A premium only plan (POP) is the most basic – and most popular – type of Section 125 Cafeteria Plan that allows employer-sponsored premium payments to be paid by the employee on a pre-tax basis instead of after-tax. Coverage may include the following: Group Medical.

Is premium conversion good?

Premium conversion reduces the amount of taxable income so it may also slightly reduce the base on which Social Security benefits are calculated for a FERS or CSRS Offset employee.

What is a Section 125 premium conversion plan?

If you are a participant in the premium conversion plan, Section 125 of the Internal Revenue Code allows you to reduce your salary (through an employer allotment) and provide that portion of your salary back to your employer.