Premium Only Plan
A Premium Only Plan (POP) is a simple way for employees to reduce some of their health insurance costs while maximizing their tax savings potential. With a POP, employees pay a portion of their insurance premiums on a pre-tax basis, which reduces their taxable income and helps them save on FICA, federal, and (where applicable) state and local taxes as well.
A POP also provides tax savings for employers by helping to reduce your payroll taxes.
With a POP, your employees’ premium contributions are automatically deducted from their salaries on a pretax basis, resulting in significant tax savings for you and your employees.
- Taxable income is reduced by the amount contributed, so employees pay less in taxes.
- With employee pretax income lowered, you pay less in social security (FICA) payroll taxes.*
* For applicable state legislation, consult your tax advisor.
The tax benefits of a POP are a powerful incentive that can help you retain your most valued employees.
We can integrate a POP with Paychex payroll to automate your employees' pretax deductions.
Paychex not only establishes your POP, we help you manage it. We provide legal documentation, compliance testing, and regular status reports to keep employees’ accounts running smoothly.
Enhance Your Employee Benefits
Paychex Insurance Agency can help you select an appropriate health insurance plan for your business needs. Once your plan is in place, we help simplify ongoing administration by integrating the plan with your Paychex payroll information. Learn More.
Our FSA includes a POP. Beyond premium payments, an FSA helps employees pay out-of-pocket medical, dental, and dependent care expenses while decreasing your company's payroll taxes. Learn More.
Health Care Reform Web Seminar
"Health Care Reform — What Employers Need to Know"
Learn details about the new health care reform law and find out what actions you need to take.
Learn More
Section 125 White Paper
"POPs, FSAs, HSAs, and HRAs: Understanding Your Options When Helping Employees Pay for Health Care"
Download our FREE white paper for information on a number of employer-provided benefits to help employees cover health care expenses.
Learn more.
For more information about our products and services, please contact a Paychex representative at 800-322-7292, Monday through Friday from 8:00 a.m. to 8:00 p.m. ET. Or, complete our online form for a no-obligation quote.
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