Premium Only Plan

You can add an employee benefit and actually save money! A Section 125 Premium Only Plan allows your employees to pay their portion of the insurance premium with pre-tax dollars.

An Employee Benefit

By participating in the Premium Only Plan, your employees can save nearly 30 percent in federal, state and FICA taxes. It’s simple: The employees’ portion of the insurance premium is payroll deducted before taxes. They don't have to file any additional tax forms as their W-2 will simply reflect the lower taxable income. This savings can help them offset the increasing cost of medical insurance.

Employer Savings

Because participating employees reduce their taxable salary, this translates into lower FICA payments and other payroll taxes for your company.

The following example shows the approximate tax savings for a company with 30 participants in the Premium Only Plan.

While the employer’s savings would be $2,754 ($36,000 @ 7.65 percent), your employees would save $10,674 annually in federal, state and FICA taxes ($36,000 @ 29.65 percent).

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What Does My Company Receive?

Manley Services will provide you with all the information necessary to implement this program:

• A sample letter to your employees

• A sample enrollment form

• A model Plan Document

• A Summary Plan Description to be given to all plan participants

• Who to contact at Manley Services for plan support

• Operational procedures information, including:

  • How to enroll your employees

  • How to set up Your payroll to accommodate Section 125

  • Data needed and procedures to perform Key Employee concentration test

How to Get Started

Your first step is to complete the brief Service Agreement stating which services you would like us to perform, and when you would like to start. Return the form to us via mail or fax, and you will receive all of the necessary information in a personalized I. R. C. Secion 125 Operations Manual for easy implementation and tax savings.

Please mail your completed service agreement to:
PO Box 70168, Coburg, OR 97408

or fax to: (541) 485-8759 or (800) 575-1109

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