As an employer, you understand the value that a quality healthcare plan provides to your employees. Healthy employees are happy employees, and access to reliable healthcare helps them to manage their personal expenses.
However, you also need to balance your own budget. That’s why you evaluate your group benefits plans carefully, to choose the best fit for your company. If you want to pair tax savings with wider employee choice, you might be interested to learn about Premium-Only Plans, or Section 125 plans.
A Premium-Only Plan allows employees to pay their own health insurance premiums with pre-tax dollars. These plans can be used in conjunction with employer-sponsored group healthcare plans.
This is how it works: Premiums are paid from pre-tax dollars before FICA or income taxes are withheld. By utilizing this strategy, employees can reduce their federal income taxes by as much as 40 percent. Now you can offer your employees valuable healthcare benefits while also helping them to save a considerable amount on taxes.
At the same time, employers will not have to pay FICA/FUTA taxes on any wages that employees use toward their healthcare plan premiums.
As a courtesy, Bay Area Health pays the setup and maintenance fees for our clients’ POP plans. This typically is around $100 per year.
If a Premium-Only Plan sounds like it would suit your needs, call our office to learn more. We can help you calculate the expected savings for both you and your employees and decide if this healthcare option is right for your company.