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How do I Start a Section 125 cafeteria plan? Determine your eligibility. Choose a plan administrator. Determine which benefits to offer. Set up your plan documents. Communicate the plan to your employees. Monitor and administer the plan.
March 1, 2023by mycalchoice. A Premium Only Plan (POP) offers benefits to your employees and your business. Sometimes referred to as a Section 125 plan, because its allowed under Section 125 of the Internal Revenue Code, a POP lets employees use pre-tax dollars to pay their portion of eligible insurance premiums.
A Premium Only Plan (POP) offers benefits to your employees and your business. Sometimes referred to as a Section 125 plan, because its allowed under Section 125 of the Internal Revenue Code, a POP lets employees use pre-tax dollars to pay their portion of eligible insurance premiums.
A Section 125 Premium Only Plan document allows your employees to voluntarily agree to a salary reduction so that the employer can pay their insurance premium as a business expense.
Why Do They Need to Have a Separate Plan Document from the Wrap Plan Document? ERISA plan documents and the Section 125 Cafeteria POP Document are two different types of plans with different purposes and regulations. ERISA plans are regulated by the DOL and Section 125 plans are regulated by the IRS.
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Premium-only plans (POPs): A POP allows employees to pay their health insurance premiums with pre-tax money. The only expenses POP plans can cover are premiums for employer-sponsored health plans or individual health policies.

cafeteria plan document template