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Premium Only Plans (POP)
Save money and improve employee benefits

Employee Prescription Insurance | Business Pharmacy Benefits | ADPIA

ADPIA H&B Financial Services

Premium Only Plans:

You and your employees pay less in taxes. With a POP, you can save money by lowering your tax expenses, and help your employees keep more money in their pockets.

Premium Only Plan (POP)

The Premium Only Plan, or POP, is an employee benefit that can help both you and your employees reduce tax expenses by letting employees pay part of their health insurance premiums with pre-tax dollars.

Benefits of a Premium Only Plan

For your business:

  • Reduce your payroll tax costs (Social Security, Medicare and other payroll tax expenses).
  • Offset the rising cost of benefit premiums with your payroll tax savings.
  • Decrease your health insurance contributions with little to no effect on employee costs:
    • If your employees don’t contribute to the cost of their health insurance, you can initiate a contribution strategy with minimal impact to their salaries.
    • If your employees already contribute, you can increase how much they contribute without negatively affecting their take-home pay.

For your employees:

  • Employees’ taxable salary is reduced because they will use pre-tax dollars to pay part of their insurance premiums.
  • The amount of their take home pay increases because they pay less tax.

Outstanding support

With the ADP Premium Only Plan, a dedicated team of professionals can help you in calculate your savings, implement your plan and stay in compliance.

For those with ADP payroll, your POP will integrate with your existing payroll processes. You’ll get the materials you need for enrollment, on-going plan management, a Premium Only Plan document, plan summary and plan reporting. We’ll also maintain the necessary documents to help keep you in compliance.

ADP, LLC and its affiliates do not offer tax or legal advice and nothing contained in this communication is intended to be, nor should be construed as, advice or a recommendation for a particular option or strategy. Questions about how laws, regulations and guidance apply to a specific plan should be directed to your legal, tax or financial advisor. Participants can save on federal income taxes, state income taxes in most states, and Social Security/Medicare (FICA) taxes. Employers can save on the matching portion of FICA taxes and federal unemployment taxes and on state unemployment taxes in many states. State income tax rules vary by state. Check with your tax advisor or CPA to see how your state treats a POP.

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