Section §125 (Mini Cafeteria) Premium Only Plan (POP)
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POP Explanation
Child Pages
- Full Tax Deduction IRC §106
- Section 125
- Links & Resources
- Section 125 POP FAQ’s
- Flexible Spending Accounts §125
- Self Employed
Your Employee’s (and dependent’s) contribution – deduction, the portion they are paying for your companies group medical premiums can be tax deductible with a Premium Only Plan – (POP) which is allowed under Internal Revenue Code (IRC) §125 (pdf).
The way it works, is that your company signs up for a POP plan, with an authorized administrator – vendor, often the same Insurance Company that your medical coverage is through, but it doesn’t have to be. The cost of the plan is in the neighborhood of $135/year. The administrator sends you a kit and you distribute the forms and have each employee enroll. The forms do not have to be filed with the government or even the administrator. You just keep them on file in your company records.
The premiums you as the employer is paying for Medical Coverage are already tax deductible for the business and not is reportable as income to the employees under Internal Revenue Code §106. The POP plan, allows the portion of the premium that the employee is paying to also be tax deductible.
See below and the brochures on the right for more information. Feel free to Email or call us 310.519.1335 for any questions. Send us your census for Group Health Insurance Quotes
Here’s how it works.
Brochures and video are in the columns.
Lower taxable income on the employee’s 1040 
PLUS, the POP will lower the employER’s payroll taxes such as FICA FUTA, Medicare Tax, Income Tax Withholding US Code 26 C 21, Publication 535Publication 15-A State Disability Insurance (SDI) and possibly Worker’s Comp. About.com
to 
To start your companies POP Plan, just review the brochures, complete the application and return to us. The administrative process and fees (around $150/year) are nominal. It’s a WIN/WIN for both employER, employee and the dependents.
HCR (Health Care Reform) IRC §125 (f) (3) narrows the definition of qualified benefit to exclude Individual Coverage offered through the Exchange – Covered CA. Notice 2013-54 cuts off employer reimbursement outside of exchange too.
Health Net
Application 1-888-595-2261 tasc online.com/
Blue Cross
Deduction & Payroll Calculator
Pay Check City – Video Instructions @ 2.16 minutes 
Broker ONLY
Are all employers who provide health insurance benefits REQUIRED to have a Sect 125 POP plan?
The health insurance benefit premiums could be fully or partially subsidized by the employer.
No. What makes you think that a POP 125 plan is required for all employers?
A POP plan allows the portion paid by the employee to be tax deductible. Here’s a excerpt of the Blue Cross brochure, cited above:
Are you thinking of a full Section 125 cafeteria plan, that offers a full array of benefits, like adoption assistance, child care assistance, life insurance, health savings accounts, flexible spending?
What exactly is a pop plan?
Thanks for your question. I guess this page wasn’t as understandable as I thought. I’ve rewritten the introduction to make the POP concept easier to comprehend. Let me know if more clarification is needed.