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 Horizon | Without Horizon | |
| 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
Horizon can help get you started. Our services include:
- Providing plan document and Summary Plan Description drafts
- Performing IRS nondiscrimination testing