Under the IRS Section 125 program, an employee may choose to pay for qualified benefit premiums before any taxes are deducted from employee paychecks. The Premium Only Plan/POP is a part of the Section 125 Plan and allows for certain employee-paid group insurance premiums to be paid with pre-tax dollars.
In the case where employees need to actively opt themselves in, either:
1) A Section 125 plan can be added and the Section 125/POP form would be added to that plan on the Plan > Forms page. If the employee enrolls in the Section 125 plan, their elections are considered pre-tax. If they waive the Section 125 plan, their elections would then be considered post-tax.
Forms that include instructions, like the excerpt shown below, will use this approach. These forms are not asking which specific plans will be considered pre-tax, the assumption is that all eligible plans will be taken pre-tax.
Examples of forms that use this approach:
- Conexis POP (US)
- ADP Section 125 POP (US)
- Infinisource HSA POP (US) – this form assumes all eligible plans will be pre-tax, is also asking for the HSA election amount if the employee has one. The form would be included in the Section 125 plan as well as any HSA plans set up in EaseCentral on the Plan > Forms page.
2) Alternatively, some POP/Section 125 forms are looking for each benefit elected as pre-tax be identified on the form. In this case, a Pre-Tax and Post-Tax version of the plan can be set up for each eligible plan type. The Section 125/POP form would need to be added to each pre-tax version of the eligible plan (e.g., Medical, Dental, or Vision).
The Section 125/POP form would not be attached to the post-tax version of the plan.
The employee would be auto-enrolled in Section 125 (pre-tax) if the employee elects the plan (e.g. Medical, Dental, or Vision) and that particular plan would be identified on the Section 125/POP form. The Section 125/POP form would not generate if the employee chose the post-tax version of all eligible plans.
The below examples of forms will always use this approach since they require the specific pre-tax plans elected to be identified on the form.
Basic POP (US)
Freedom Services POP 2016 (US)
Note: If the Section 125/POP form exists in our Form Library but is not listed as an option on the Plans > Forms page for a particular plan type please reach out to our Success Team at firstname.lastname@example.org