Section 125 POP Plan

section 125 pop plan

Why do you need a Section 125 - Premium Only Plan - POP?

The name “Section 125 Plan”  POP, derives from Title 26, Section 125 of the United States tax code. This law outlines the rules employers must follow when establishing a cafeteria plan. It defines the term cafeteria plan and describes the types of benefits such a policy may include. The law prohibits programs that discriminate against lower-paid workers by favoring those who have high compensation. If you are found to be discriminatory, the benefits it provides to highly-paid workers will be taxed.

Cafeteria 125 plans, POP is an employee benefit that allows employees to pay for their portion of insurance premiums with pretax dollars saving on federal, state, and Social Security taxes. The plan enables pretax offerings on benefits.

The 125 plan or POP Plan includes health, dental, accidental death and dismemberment, and even voluntary benefits. Volunteer benefits include examples such as cancer, accident, and other benefits. IRS tax laws require a 125 Premium Only Plan (POP) or a Flexible Spending Account (FSA) to pay medical, dental, and other eligible insurance premiums on a pretax basis.

Not only do employees keep more money in their pockets, you, as the employer, will save money, lower your taxes paid towards the employee’s Social Security match. HR Service Inc. POP Solutions, combined with our Premium Only Plan, is so convenient. You can easily create your plan documents and summary plan description using our web-based tool and easily make any needed updates. Additionally, we keep your document current when there are changes in the IRS requirements. We provide everything you need for a formal plan document. Best of all, it only takes a few minutes to create. 

Also, we offer a tool to complete year-end non-discrimination testing that is required each year. Our staff is ready to assist you with anything. If you have any questions about how a Section 125 plan will benefit you and your employees, or what you need to submit, please contact us. 

Sample Layoff Notification Letter

We make it easy to file section 125 forms to ensure compliance, all day, everyday. Here's what's included:

Timely Updates

Access to a legal team that is constantly involved with the latest legislative changes enables you to get timely, automated updates to your Section 125 POP plan documents.


With online access 24/7, you can make updates to your POP plan documents at any time in just moments.

Safe & Secure

Our site uses the latest in Internet security to protect your sensitive company’s information.

Cost Effectiveness

While most companies have yearly document fees and charge per ammendment, our low annual fee includes all amendments and critical updates to your documents.

Federally Mandated Forms

Federal law requires all employers to have a 125 Cafeteria Premium Only Plan (POP document) if offering tax free benefits to their employees.

We Help You Stay In Compliance

Many companies have a Section 125 POP plan document on file, but it is out of date. Our automated and real time updates make staying in compliance a breeze.

Create your documents instantly by clicking below

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