New Offering: Section 125 Cafeteria (POP) Plan Services Now Available

We are pleased to announce a new service offering available through Payroll Systems. We have partnered with isolved Benefit Services to provide setup and administration of cafeteria Section 125 Premium Only Plans (POP plans).

A Section 125 cafeteria plan is a written employer-sponsored plan that allows employees to pay for certain qualified benefits on a pre-tax basis through salary reduction. These plans provide employees the opportunity to choose between taxable and eligible nontaxable benefits, with elections made under the terms of the plan.

Generally, qualified benefits provided under a Section 125 plan are not subject to federal income tax withholding, FICA tax, and FUTA tax, offering potential tax savings for both employers and employees when properly structured and administered.

Through our partnership with isolved Benefit Services, we offer POP plan setup along with ongoing annual maintenance to help ensure continued compliance with evolving benefits regulations and tax law. This service helps employers and employees realize potential tax savings while reducing administrative burden and compliance risk.

In addition to POP plans, isolved Benefit Services also provides full cafeteria plan setup and administration, including Flexible Spending Accounts (FSAs), Health Savings Account (HSA) integrations, and Dependent Care Reimbursement/Assistance Plans. These solutions include plan administration and reimbursement processing, offering a more comprehensive benefits option for employers seeking to expand their offerings.

Cafeteria plans may include qualified benefits such as:

Accident and health benefits
Dependent care assistance
Group-term life insurance (within applicable limits)
Adoption assistance
Health savings accounts

Please reach out to Payroll Systems to discuss how a POP Section 125 plan or full cafeteria plan can benefit your business and employees.

This resource provides general informational explanations of cafeteria plan rules, eligibility, and tax treatment. It is intended for background understanding only and does not constitute legal or tax advice.