As employers of all businesses can benefit from the use of a premium-only plan, a brief summary of the process through which companies acquire POP savings will assist employers as they seek to strengthen the financial integrity of their sponsored health insurance programs.
Employers must also provide an spd document to all POP participants. The SPD explains specific POP plan nuances, detailing claim filing procedures as well as information relevant to POP sponsorship and administration. The SPD must be filed with the Department of Labor within 120 days of the decided POP plan effective date and must be distributed to all POP participants within 90 days of employee participation.
Initial filing procedures for IRS premium-only plans require a series of specific required administrative documents to be completed. The POP plan document relates specific plan details including a thorough description of covered employee benefits, participation policies and ordinances, annual contribution limits, election procedures, employee eligibility, and employer premium contribution.
Once the premium-only plan filing procedures are in place, employers may begin deducting their employee premium contributions before regular state and Federal taxes are withdrawn.
Failure to correctly apply any of the steps involved with the POP plan subscription process, from initial filing procedures to continued plan maintenance, will compromise the integrity of your plan and may result in not only a loss of tax-free premium contributions but may bring Federal penalties. It is for this reason that it is strongly recommended employers use a POP plan service provider as they seek to acquire premium-only plan tax-free savings.