Do you need a Section 125 Plan Document? Get one today!

IRS Requirement for pre-taxed employee benefits If you are an employer wanting to allow your employees to pay group health and other insurance premiums with pre-tax salary deductions, the answer is yes, you need a Section 125 plan document . In most employer-sponsored group benefit plans, employees pay for health insurance and other qualified benefits with tax-free dollars. It's just taken for granted; that's the way it's done. However, that tax-advantaged treatment is not automatic. The employer must do it through a Premium-Only Plan (POP) or Cafeteria plan, and to set up one of those, you need a Section 125 plan document. Tax savings for everyone with a plan document A Section 125 Premium Only Plan document allows your employees to voluntarily agree to a "salary reduction" so that the employer can pay their insurance premium as a business expense. The portion of the insurance premium the employee is responsible for is deducted right off the top of income before