POP Plans Strengthen Employers During National CrisisWilliam Bailey
January 24, 2012 — 1,727 views
More often than not, it is the problems surrounding healthcare which make it through our media and not the solutions. There are of course the barrage of different political and legislative reforms combating one and other while vying for the attention of the general public; but the vast majority of the Federal AHCA and state specific legislative changes are so steeped in nuanced obscurities that even the most learned of experts struggle to understand them completely. It therefore behooves employers toiling to provide employer sponsored insurance to turn their attention, if only briefly, toward more pragmatic, simple and accessible solutions to the growing number of challenges they face. IRS section 125 premium only plans (POP), a tax-free approach to premium cost savings, are one technique employees can utilize when seeking to control the costs of healthcare.
In order to appreciate the value a POP plan brings to employers, a firm understanding of employer sponsored healthcare and its relevance to the United States economy must first exist. Elise Gould, the Director of Health Policy Research for the Economic Policy institute, authored an article titled Employer-Sponsored Health Insurance Erosion Continues that gages the decline of employer sponsored health insurance among individuals nationwide.
Employer sponsored insurance (ESI) insures more Americans then any other bracket of coverage. With more than 157 million people covered by ESI, the daunting statistics put forth by Gould in her survey indicate the development of an economic crisis over the last decade where healthcare is concerned. Gould's survey presents that, as of January 1, 2000, the number of people insured by ESI consistently fell annually until 2009 (the percentage has reportedly continued to decline to this date, 2009 is the year publication). At the rate of decrease, over the course of 9 years more than 45.7 million previously insured Americans lost their coverage.
The beauty of premium only plans is that, with almost no financial drawbacks, they allow employers to increase the affordability and accessibility of sponsored healthcare plans. Gould's data is in many ways the result of the growing price of healthcare premiums (131% over the last ten years). POP plans allow employees to contribute toward their premiums with tax-free dollars, thus addressing the price increase and compensating for it. When an employer subscribes to a POP plan they can deduct their employees monthly premium contributions before taxes are withdrawn. This process dramatically increases employee take-home pay and provides the employer with a 7.65% reduction toward their matching FICA taxes. Employers save money, employees save money, and the percentage of employees able to subscribe to ESI increases.
Employers interested in taking advantage of the savings POP plans offer should consider Taxfreepremiums as the premier POP plan service provider. Taxfreepremiums provides an entirely web-based support system and deals with all the initial premium only plan filing procedures. Between automatic compliance updates, free nondiscrimination testing software and the most competitive price available, employers can trust Taxfreepremiums to ensure their POP plans tax savings have been realized to the fullest extent.
William Bailey has authored dozens of articles on Health Care and is an expert on the financial nuances surrounding Section 125 Premium Only Plans.