What is a Premium Only Plan (POP)?
A POP is a simple Section 125 cafeteria plan that lets employees pay their share of group-insurance premiums with pre-tax dollars, cutting income and payroll taxes for employees and payroll taxes for the employer.
POPs
A Premium Only Plan is the simplest Section 125 cafeteria plan, letting employees pay their share of premiums with pre-tax dollars. It lowers taxable income for employees and payroll taxes for the employer and requires a written plan document.
What’s the difference between a cafeteria plan, a Section 125 plan, an FSA, and a POP?
A cafeteria plan, also called a Section 125 plan, is the tax-advantaged structure; an FSA is a benefit that can be offered within that structure; and a POP is a limited type of Section 125 plan that only allows pre-tax insurance premium deductions.