Introduction to Premium Only Plans (P.O.P.)

Premium Only Plans (P.O.P.) offer a way for employers to enhance the benefit packages offered to their employees. In addition, it helps to reduce taxes paid by both the employee and employer. This plan allows employees the opportunity to deduct their portion of the premiums paid for company provided benefits from pre-tax wages.
Employer Advantages
Employee Advantages
Reduce payroll-related taxes
Increase take-home pay
More Control over employee benefit costs
Reduced federal income tax and Social Security tax
Minimal investment required to implement
Reduced state tax (except
in New Jersey)

The P.O.P. concept was created through provisions of Section 125 of the Internal Revenue Code. IRC Section 125 provides tax exemptions for employee premiums contributions to certain employer-sponsored group benefit plans. The following list contains several types of nontaxable benefit plans which can be included in a P.O.P. plan.

· Health
· Vision
· Dental
· Short Term Disability
· Long Term Disability
· Group Term Life (up to $50,000)


If you need any additional information, a representative of CPI will be happy to discuss the merits and benefits of a P.O.P. with you.