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IRS Requirements for Pre-Tax Benefit Deductions

Marshall & Sterling E-Alerts - Keeping You in the Know

Do you currently deduct your employees’ portion of qualified health insurance premiums on a pre-tax basis?

A Premium Conversion Plan, also known as a Premium Only Plan (POP) is a pre-tax plan defined via Section 125 of the IRS Code. If an employer is deducting insurance premiums from employee wages on a pre-tax basis, a written POP document must be in place. The POP document indicates that employees pay for their share of group health premiums with pre-tax dollars.

If you do not currently have this important compliance document in place, Marshall & Sterling can help! Our Plan Document Preparation services include providing you with a custom Section 125 Plan Document so you have this available for any needed use: an IRS audit, the DOL requesting a copy, an employee asking to view the document, or for your own personal administrative guidance.

For a brief overview on the “Who, What, & Hows” of Pre-Tax Benefit Deductions & Section 125 POP Plans, check out the most recent episode from our “Compliance Minute” video series. Click here to download the slides from the video.


Disclaimer: The information contained in this message is for general informational purposes only and does not constitute legal advice.