Premium-Only Plan (POP) - FAQ

Premium-Only Plan (POP) - FAQ<a name='top'></a>

Q: Why do I need to pre-tax my premiums?
A: By having your employer pre-tax your premium, you will save on Federal, State and FICA taxes on those premium dollars.

Q: Can I stop pre-taxing my premiums at any time?
A: "No. You cannot change your election at any time, however you can change your election at the beginning of a plan year or if have an eligible change of status. A change in status would be one of the following events:
  • Marriage
  • Birth or Adoption of a child
  • Divorce, Legal Separation or annulment
  • Death of Spouse and/or dependent
  • Termination of employment by employee
  • Termination or commencement of employment by your
  •  spouse or your dependent
  • You or your spouse take an unpaid leave of absence
  • You, your spouse or dependent are switching from
  •  part-time to full-time (or vice-versa)
  • A significant change in your family's health
  •  coverage attributable to your spouse's employment
  • Dependent ceases to satisfy the requirements for
  •  unmarried dependents due to the attainment of age, student status or any similar circumstances as provided under the accident or health plan under which the employee receives coverage
  • A change in the place of residence or worksite of the employee, spouse or dependent

Q: What types of premiums can be pre-taxed?
A: "The following premiums can be pre-taxed (as allowed by the plan):
  • Health Insurance
  • Dental Insurance
  • Vision Insurance
  • Supplemental Benefit Premiums (if there is no cash value) 
  • Group Term Life Insurance (for the employee up to a $50,000 policy)

Q: Which premiums should not be pre-taxed and why?
A: "The following premiums should not be pre-taxed because if the premiums are pre-taxed, any benefit paid to the employee will be subject to income tax withholding:
  • Long-term Disability
  • Short-term Disability
  • Some Cancer Insurances

Q: Which premiums are not allowed by the IRS to be pre-taxed?
A: Dependent Life Insurance and Long Term Care Insurance premiums are not allowed to be pre-taxed at this time.

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