What is the difference between a full blown Section 125 Plan and a Section 125 Premium Only Plan?
A premium only plan contains limited language of the section 125 plan document that only allows for eligible benefit premiums and HSA (health savings account) contributions to be withdrawn from payroll on a pre-tax basis.
A full irs section 125 plan allows for FSA (Flexible Spending Accounts) and dependent child care to be deducted from payroll on a pre-tax basis for eligible out of pocket expenses, but also most commonly includes the Premium Only Plan language with the eligible benefit premiums.
How much does a Premium Only Plan cost?
Typically a plan document and necessary forms will cost anywhere from $100-$600 through an attorney or tax advisor. Many payroll providers charge set-up fees as much as $600 but once you have the document you will be required to update as new legislation is available. A Premium Only Plan will cost only $89 a year if you choose www.taxfreepremiums.com as your section 125 document provider, which includes all mandated updates.
What is included with your service?
As part of our service you are provided with:
- The Plan Document
- The Summary Plan Description
- Default Enrollment Notice Forms
- Non-discrimination Testing Software
- Compliance Updates – Any time there is a change to the law that requires your plan document to be changed, we will update the document online and let you know when it is ready for you to download and print your updated document.
Why should I renew annually with TaxFreePremiums.com?
As laws change, your Premium Only Plan will become out of date. When the laws change it will become necessary to update your document. Instead of worrying about tracking the law yourself, let TaxFreePremiums.com do it for you. When the laws change, we will update the document and let you know to download and print the updated the document.
When do you have to do the non-discrimination testing for a Premium Only Plan?
Every year when the plan year ends is the appropriate time to do the non-discrimination testing for the Premium Only Plan.
How do I setup an account?
To setup your account today go to: taxfreepremiums.com/main/signUpCompany. You will be able to create a username and password. On the next page you will enter the billing information for the annual fee. After the billing information, you will be asked a few questions about your benefits. After the additional information you will be able to download all of your documents and a checklist that will walk you through the implementation of the Premium Only Plan.
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