Affordable Section 125 Plan Documents just $99

Our affordable Section 125 Plan document can help add the missing piece to your employee benefits package.

Affordable Section 125 Plan Document just $99

Employers looking to keep and attract the best employees know that a sound benefits package is key. Benefit surveys show that a strong health benefit package is on the must-have list for most people.

You may be surprised at how affordable it is to upgrade your health plan benefit, especially when you add in the tax savings. Don’t let it be the missing piece in your benefit package.

Internal Revenue Service Code Section 125 allows employees to purchase health insurance and other accompanying benefits tax-free. This and other advantages makes the Section 125 Plan (also known as the premium only plan [POP] or cafeteria plan) a winning choice for employers wanting to offer valuable health insurance and flex benefits including the FSA and HSA to employees.

To make it even more affordable, Core Documents is pleased to offer affordable Section 125 Plan Documents for just $99. This cost reflects a one-time setup fee, not an annual charge. For an additional $50, employers can choose the Deluxe Binder option that includes the PDF email version plus a printed plan document in a 3-ring binder.

Section 125 Plan FAQ’s

The following Q&A is presented to provide the basics of how a Section 125 plan works and the benefits of having one. At the end of the article you will find our easy-order buttons, a link to download a free Section 125 Plan employer’s guide from Core Documents, and right after that a video presentation on the Core 125 premium only plan document.

How do employees benefit from a Section 125 POP Cafeteria Plan?

By participating in a Section 125 Plan, employees avoid paying income tax on qualifying premiums. This is because the premium is deducted from their net pay before withholding taxes are calculated. This means an employee doesn’t have to make $300 in order to pay a $200 insurance premium because the tax liability is immediately eliminated.

A Section 125 Plan makes qualifying insurance premiums more affordable to employees, allowing them to save 23%-40% of their Section 125 premium deductions in federal income tax savings alone. Actual tax savings include not only federal income tax but also city, state, and FICA (Social Security and Medicare) taxes. Under a Section 125 POP Plan, an employee’s take-home pay is often substantially increased, helping to reduce the high cost of providing health care coverage for family members.

How do employers benefit from a Section 125 plan?

A Section 125 Premium Only Plan is unique in that it is one of the few employee benefit plans that will continually pay dividends back to the employer. It does this by eliminating the 7.65% employer-matched Social Security and Medicare tax in addition to some federal and state unemployment taxes. Depending on the state where you live, employers may also be eligible for workers’ compensation savings.

The bottom line is: Employers who establish a Section 125 Plan recoup the small $99 one-time setup fee quickly and then continue to realize significant tax savings year after year.

Who Can Participate in a Section 125 Plan?

Employees of regular corporations, S corporations, limited liability companies (LLCs), partnerships, sole proprietorships, professional corporations, and non-profits can all reduce payroll taxes by establishing a Section 125 premium only plan.

Note: While the Internal Revenue Code prohibits a sole proprietor, partner, members of an LLC (in most cases), or individuals owning more than 2% of an S corporation from participating in the Section 125 POP Plan, owners can still benefit from the savings on payroll taxes by sponsoring a plan for their employees.

When Is The Best Time To Start a Section 125 POP plan?

Contrary to popular belief, a Section 125 Premium Only Plan can be started at any time of the year. Ideally, you want to establish a Section 125 Plan when your group health insurance renews, as that is when rates typically change. This gives your group a chance to sign a new Section 125 election form prior to the new Plan Year.

It is also quite acceptable to start a new ‘short’ Plan Year anytime. For example, it’s May, but you prefer a calendar Plan Year from January 1 to December 31. You can start a short Plan Year on June 1 and end the first short Plan Year on December 31. After December 31, your Section 125 Plan will be on a calendar year from January through December.

What if my existing Section 125 Plan needs to be Updated?

If you already have a Section 125 Premium Only Plan you started years ago, you can amend and restate the Plan at anytime. Our order forms address both the amended and restated document dates. We simply need the original start date of your old plan so we can maintain the continuity back to the original start date.

It’s not unusual for a group to misplace a Section125 Premium Only Plan Document and need to replace it. That is also a good time to update the old plan with current plan documents.

Also, if your Premium Only Plan document was written before 2012, Core Documents would be glad to help you update it as soon as possible. Between changes in the IRS Code and new ACA laws, today’s Plan Document is almost 15 pages longer than documents prior to 2012.

So I’ve Purchased A Section 125 Plan Document, What’s Next?

This question is asked more frequently than any other.

You’ll purchase a single-use license agreement for a Section 125 Premium Only Plan Document for either the Basic PDF version or the Deluxe Binder version. These are not fill-in-the-blank documents. Each Section 125 Premium Only Plan document is specifically prepared for each client based on the information provided in the application, making your Plan totally unique.

In most cases you’ll receive your Section 125 Plan Document in PDF format via email within hours.* If you choose the Deluxe option with 1” ring-bound notebook, it will normally be mailed the same day. You’ll receive a Resolution to Adopt the Plan, an IRS-required Section 125 Plan Document, a DOL-required Summary Plan Description, Election Forms, and a complete Administrative Section.* For a small additional fee you can purchase select documents on a CD disk so you always have a backup copy. An outside administrator or software is not necessary to implement a Section 125 Premium Only Plan.

Administration of the plan is very simple:

• Sign the Section 125 Plan Document in two places and have it available in the event of an IRS audit, the DOL requesting a copy, an employee asking to view the document, or for your own personal administrative guidance.
• Every employee should receive a copy of the Section 125 Summary Plan Description and an election form.
• Election forms should be signed by employees for specific approved deductions and kept on file.
• You will be required to conduct Section 125 non-discrimination testing annually. Core Documents will include DIY discrimination testing forms to assist you in this process.

For your convenience, we provide you with a one-page summary of all Section 125 Plan Sponsor responsibilities. This document does not have to be filed with the IRS or the DOL, or any other government entity. Annual 5500 reporting was suspended in 2002 and is no longer required.

If you are as convinced as millions of other small employers that the Section 125 Plan is right for you, choose an order method below and we will start preparing your plan documents package right away:

*Section 125 premium only plan documents are processed in the order they are received. Most of the time, all documents go out via email within 24 hours; however, December, January, and February are our busiest months of the year. If you are in a situation where you must have your plan within 24 hours during our busy season, a rush order fee of $25 will bring your document to the top of the stack to be processed immediately.

Download the Core Documents Section 125 Cafeteria Plan Employer Guide HERE

Recent blog topics regarding Section 125 Premium Only Plan Documents:

Why Your Business Needs a Section 125 Cafeteria Plan Document

06/23/2016 Small Business Healthcare Relief Act H.R. 5447 Would Create Safe-Harbor for Non-Exchange Individual Health Insurance Premium HRA Plans

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Why Amend and Restate Section 125 Cafeteria Plan Documents? IRS Rulings since 1999 on one page.

Refund Policy: Purchaser understands that goods and services provided by Core Documents, Inc. are non-refundable. Orders cancelled prior to shipping are subject to cancellation fees that are applied to the cost of goods and services provided during the review, draft, and preparation of your order.