Today we will be looking at what a Section 125 Premium Only
Plan, commonly referred to as a POP Plan, is and why as a business owner you
need it.
A POP Plan is a pre-tax salary reduction plan that allows
employees to pay for group insurance premiums out of their paycheck tax
free. If your business offers a group
plan that employees contribute to, you are required by law to have the POP Plan
document. You must distribute this
document and a Summary Plan
Description to your employees. You must also keep a
record that employees have agreed to let you reduce their payroll to pay their
portion of the premium.
With the Department of Labor starting to crack down on group
plans, stating they will audit every plan within the next five years, it is
critical to have this document and distribute it if you offer a group
plan. Over the last year, when the DOL
has gone in to audit group plans almost one third of plan sponsors have had to
play over $10,000 in fines. The DOL has
said this is in large part to groups not having a POP Plan on file or not
distributing it to employees.
If you have any questions on how to make sure your group plan
is compliant with DOL regulations or any questions concerning the POP Plan
contact us at 630-773-2228 and you can speak with one of our legal experts.
Stay tuned for more information about compliance rules and regulation
concerning your group plans as we will be sending out more articles in the
coming weeks.
very well-satisfying knowledge is provided here, I am really impressed by the way of writing and the way the details are mentioned for Section 125 plans, I would also approach my employer for this plan now.
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