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Premium Only Plans Help Businesses Save Money

Many business owners want to provide their employees with valuable health care benefits, but face the challenge of dealing with rising insurance premiums. For the business owner who wants to control overhead costs, but also offer a competitive benefits package, a Section 125 Premium Only Plan can provide the solution.\r
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Under a Premium Only Plan, the employer can define a fixed dollar amount that he will contribute toward each employee’s health insurance premium. Employees then use this dollar amount to select their own plan from a menu of options offered thru the employer’s benefit package. If employees desire a more expensive plan, for example one with a lower deductible, he or she can pay the difference through payroll deduction using pre-tax dollars.\r
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Both employer and employee can reap valuable tax benefits from choosing a Premium Only Plan. Under Section 125 of the IRS code, employees can save 20% to 40% of their pre-tax premium deductions in just federal income taxes alone. Under a Section 125 POP employees take-home pay is increased which helps reduce the high cost of providing health coverage for family members.\r
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Employers benefit from Premium Only Plans by gaining better control over their budgets. They also save time and promote a happier workplace, by taking themselves out of the arduous process of selecting a health care plan that suits every employee. Workers are equally grateful for the arrangement, because they gain more control over their own health care plan, and are able to select one that matches their own needs and budget.\r
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We recommend that employers offer a variety of health care plans in different tiers (Bronze, Silver, Gold, and Platinum), so that their employees can choose a plan with acceptable out-of-pocket costs. For help deciding upon a Premium Only Plan menu, or for answers to your questions about group health insurance, give us a call! We specialize in helping employers provide important health benefits while managing their own budgets.

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