Save money with a Section 125 benefit plan
A benefit to employers outlined in Section 125 of the U.S. tax code is the Premium Only Plan (POP). POP plans allow employees to withhold a portion of their pre-tax salary to pay for their premium contribution for a Blue Cross and Blue Shield of Kansas (BCBSKS) employer-sponsored benefit plan. The plan offers a simple way to obtain favorable tax treatment for benefits already offered. A POP plan is the simplest type of Section 125 plan and requires little maintenance once it’s been setup through payroll.
A Section 125 plan from BCBSKS can be used for the following premiums:
Every dollar ran through the Section 125 plan reduces an employer’s payroll.
Therefore, you don’t have to pay FICA premiums on those dollars. In many cases, the savings can add up to as much as 8 percent of every dollar being passed through the plan. Plus, it’s big savings for your employees. Employees can save 20-40 percent of their payroll deductions on city, state, federal, Social Security and Medicare taxes.
A Section 125 plan is great for businesses of any size.
The setup fee for a Section 125 plan is based on the number of full-time employees. The employer must carry at least one product with BCBSKS to maintain or enroll in a Section 125 plan.
An annual maintenance fee is assessed. For two -14 employees, there is an annual fee of $50. Employers with more than 15 employees will pay $100 per year.
Utilizing the tax code for your business can be an incredible way to enhance your employee benefits package, while simultaneously boosting your margins. Talk with your BCBSKS representative to get started.
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