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Premium Only Plan Employer Brochure

Our Premium Only Plan saves you and your employees tax dollars by allowing employees to pay for their portion of employer-provided health and/or dental plans with pre-tax dollars. By using pre-tax dollars, employees will see their take-home pay increase. You save too, since your taxable payroll decreases. This is an Internal Revenue Code (IRC) Section 125 plan.

Employer savings example

  With Further Without Further
Annual payroll (30 employees x $40,000) $1,200,000 $1,200,000
Employee POP contribution (30 employees x $150 x 12 months) $54,000 $0
Net payroll subject to payroll expense $1,146,000 $1,200,000
7.65% payroll expense (FICA) $87,669 $91,800
Payroll expense savings $4,131 None

This company saved $4,131 in annual payroll expense with the Premium Only Plan. The company had 30 employees with an average annual compensation of $40,000. Each employee contributed $150 per month toward the medical premium. 

Benefits of the plan

  • Easy to implement and administer
  • Saves tax dollars
  • Can be used with any group health or dental plan
  • No risk of loss
  • Helps ease employee cost sharing

Tax savings without a big administrative cost

Further can help get you started. Our services include:

  • Providing plan document and Summary Plan Description drafts
  • Performing IRS nondiscrimination testing
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