Section 125 Premium Only Plan


What is a Section 125 Premium Only Plan
IRS Section 125 Premium Only Plans were introduced by the Revenue Act of 1978. These plans allow employers to reduce payroll taxes by making one simple adjustment to the payroll process. Under a Section 125 Premium Only Plan employees elect to pay their portion of health insurance premiums on a pre-tax or tax-free basis rather than on an after-tax basis. This creates savings for both the employee and the employer.
How Employees Benefit from a Premium Only Plan.
Employees save 20 to 40% of their pre-tax Section 125 premium deductions. The tax savings are on city, state, and federal income taxes, including Social Security and Medicare taxes on money used to pay for their portion of insurance premiums. Employees take-home pay is increased which helps reduce the cost of providing health coverage for family members.
How Employers Benefit from a Premium Only Plan.
Employers benefit by reducing the matching Social Security and Medicare taxes, and sometimes Federal and State unemployment taxes. Depending on the state, employers may also be eligible for worker’s compensation savings. 

Here’s what will happen next:  Step 1: Complete the enrollment form below

Step 2: A benefit plan advisor will review your questionnaire for completeness. 

Step 3: Schedule an Appointment to finalize your plan.  Once the review is complete, we’ll prepare your Plan Document, SPD, Forms, helpful guides, and easy-to-follow signing instructions.


Name of Benefit Programs to be Offered: (Check those you wish to include): *

Effective Date *



Section 125 Premium only plan includes:

  • Resolution to Adopt a Plan- Includes minutes of the meeting to adopt the HRA Plan as an employee benefit.
  • Plan Document – Plan Documents are personally prepared for each church and kept on file for review for IRS, etc. 
  • HRA Summary Plan Description (SPD) – Explains the Plan Purpose, Who is Eligible, How To Enroll, etc. in easy to read language. Also includes all information required by the Internal Revenue regarding the Plan Year Start and End Dates, Agent for Legal Service, Fed. ID#, and information regarding COBRA, FMLA, and required DOL information.
  • Election and Claim Form – Personalized for your church, it will include the Election Agreement and Claim Form to submit bills to the church for reimbursement.
  • Administrative Handbook – Includes sections on  Administration, Non-Discrimination Testing, and Reporting and Disclosure information.