Connecticut legislature passed a law requiring that all Connecticut employers sponsoring healthcare for their employees, as well as providing employees with tax-free deductions on their premium contributions, subscribe to an IRS provided section 125 premium only plan. Legislation enacted this requirement with the hope that POP plans would increase the accessibility of sponsored health insurance for employee's state wide.
Connecticut law is very particular on its compliance policies. Businesses are not distinguished by the number of individuals they employ and are required to maintain compliance to a POP if they provide any payroll deductions for their employees. Find out more details about POP plans via www.cxcsolutions.com/compliance/premium-only-plan.
Image source:-Google
Legislation also requires that business owners subscribing to a premium only plan perform annual nondiscrimination testing; this ensures that high wage earners and "key employees" do not acquire a disproportionate or unfair percentage of the POP plan tax savings.
The Section 125 premium only plan is a form of cafeteria plan; it allows businesses of all sizes and disciplines to apply tax free dollars to their sponsored health insurance. When an employer subscribes to a POP they can deduct their employee premium contributions before regular State and Federal taxes are deducted.
The process is as simple as it is efficient. Employees enjoy a massive take-home pay increase and employers also save more on their annual FICA taxes. Combined, the cost of sponsoring health care is generally reduced by 40%, employee satisfaction increases, and the ability to provide greater accessibility to sponsored health care is provided.
Share this post: on Facebook on Google+