Benefits Chalk Talk: Premium Only Plan (POP)

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Welcome back to another edition of “Benefits Chalk Talk.” In this series at our blog, we provide you with valuable, up-to-date, relevant information about health benefits planning so that you can put the things in place that make the most sense for yourself or your company. At Policy Advantage Insurance Services, we feel that informed consumers can make a really big difference in our industry.

Today we’re going to be talking about “Premium Only Plans” (POP). The big reason we want to talk about this concept, is because there are some significant tax advantages that can be utilized by employers when adopting this strategy.

The concept of the Premium Only Plan (or POP) really is very simple. It’s exactly what it says it is: it’s a program that allows employees of an organization to pay for certain insurance premiums tax-free through payroll. That’s all there is to it. This concept is allowed under Section 125 of the IRS code.

Example: John Doe is an employee at Acme Corp. Acme Corp offers it’s employees an opportunity to purchase individual health insurance policies pre-tax through a Section 125 Premium Only Plan (POP). So, John Doe purchases a $250/month individual plan from Cigna, and submits his claim through Acme Corp’s POP third party administrator. By doing so, John Doe is now paying for his $250 monthly premium on a pre-tax basis (ie: before the government takes their money), and then paying taxes only on his remaining income.

As you can see in the above example, by pre-taxing his individual insurance premiums through a Section 125 POP, John Doe can save a lot of money on taxes over the course of the year. His employer (Acme Corp) can also reduce their FICA/FUTA liability (by ~7.65%).

Here are some of the types of policies that can be purchased w/ a Premium Only Plan (POP):

  • Major medical individual health insurance premiums (health insurance)
  • Limited benefit individual health insurance premiums
  • Dental & Vision
  • Medicare Part A or B, Medicare HMO (however, Long Term Care policy premiums cannot be reimbursed through a POP plan)
  • Employer Sponsored Health Insurance Premiums (group plans)
  • Qualified Ancillary Premiums (Accident Plans, Cancer Plans)
  • Medicare Advantage and Medicare Supplement Premiums
  • COBRA Premiums

Thanks for stopping by, we hope you found our information to be valuable. Check back at our blog to get further information about funding healthcare. Also, please share with your friends, clients, colleagues, and family. Here are a few of our other information outlets:

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Professional Designations: RHU® and REBC®

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This blog post is about helping people understand insurance professional designations. Sometimes you’ll see a group (or grouping) of letters after a person’s name who works in the insurance industry. In most cases, these are advanced licenses and continuing education. The professional you’ve chosen has decided to further their education in the line of business that he or she works in (“lines of business” = life insurance, health insurance, property insurance, etc).

Today we’re going to take a closer look at the source of two of them:

  1. Registered Health Underwriter® (RHU®):
  2. Registered Employee Benefits Consultant® (REBC®):

The reason we’ve chosen these two is because they deal specifically in the areas of health insurance and employee benefits. If you’ve kept up with our content here at Policy Advantage Insurance Services, you’ll know that these are the primary areas where we work.

Professionals with these designations can be an extremely valuable resource for you. These designations are robust. These are individuals that have:

  • Passed rigorous examinations (this isn’t just a Saturday conference at the Holiday Inn… we’re talking about hundreds of hours of study, days of proctored testing, where the material needs to be known cover-to-cover, and all finals are final).
  • Have met experience requirements.
  • Adhere to strict ethical standards (ie: providing advise in the interest of the client).

According to NAHU ( the National Association of Health Underwriters):

The Registered Health Underwriter® designation is the undisputed professional credential for persons involved in the sale and service of disability income and health insurance. Individuals earning the RHU designation demonstrate a high level of knowledge about the principles and practices governing the disability income and health insurance business.

Here are some additional facts and information about these professional designations:

  • The RHU® and REBC® designations are issued by the Solomon S. Huebner School at The American College in Bryn Mawr, Pennsylvania.
  • The American College is a regionally accredited institution (the highest level of accreditation in the United States).
  • The college offers several professional designations, two types of master’s degrees, and a PhD program.
  • It is a non-profit private school that was established in 1927.
  • Solomon S. Huebner (who founded The American College) was a professor at the University of Pennsylvania in the early 1900’s, and was a pioneer in the insurance industry. For more/additional information about Huebner, click here.
  • Although the University of Pennsylvania and The American College are completely separate institutions, the University of Pennsylvania maintains the prestigious S.S. Huebner Foundation and Geneva Association.

As illustrated, these professional designations can be an extremely valuable asset for someone seeking advice and consultation in the areas of health insurance and employee benefits. You can count on the information that you receive to be valuable, up-to-date, relevant, and ethical. In future blog posts, we’ll describe the specific skill sets and detailed knowledge that holders of the RHU® and REBC® designations have.

Thanks for stopping by, we hope you found our information to be valuable. Check back at our blog to get further information about funding healthcare. Also, please share with your friends, clients, colleagues, and family. Here are a few of our other information outlets:

Home Page: http://www.PolicyAdvantage.com

Twitter: http://www.twitter.com/PolicyAdvantage

Facebook: http://www.facebook.com/PolicyAdvantage

YouTube: http://www.youtube.com/PolicyAdvantage

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5 Reasons to “Give Yourself the Advantage”

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There are a lot of great reasons to put a health benefits broker to work for yourself or your company these days. As health insurance planning (and the health benefits industry in general) continues to grow more complex… having an informed, knowledgeable, and up-to-date adviser on your team can be a really big advantage.

Here are 5 great reasons to “give yourself the advantage” today:

  1. Healthcare Reform is Fast Approaching: The major portions of healthcare reform (ObamaCare, ACA, the Affordable Care Act, or whatever you want to call it) are quickly approaching. We can’t emphasize this enough. Although it will take years to implement (and there will no-doubt be changes), you’ll want to make sure that you have a good understanding about what is coming up in 2014 (and beyond). Whether you’re an individual or business, if you “miss the boat,” it could end up costing you a lot of money. Contact us with questions today. **Update 1/1/2014: Healthcare reform is here.
  2. Health Insurance and Health Benefits are Complex: As the health insurance and health benefits “system” continues to grow larger, navigating this landscape can become an increasingly burdensome chore for the typical consumer. We’ve got great news for you: we know this industry well, and can help you navigate it. There’s not a better feeling than having an informed friend on your side, helping you with the ins-and-outs. Just check our growing list of customer testimonials.
  3. Save Money and Improve Coverage: Yes, you heard that right. Individuals and business owners take note: with just a few simple adjustments to your current program, you may be able to improve your coverage, and save money at the same time. How’s that for a home run? Having someone in your corner (who knows the industry well) can help you accomplish this. Consider it a “tune-up” for your health insurance program, free of charge. Example: a minor adjustment with a tax incentive here, then a simple adjustment to a physician network there… and boom. You’ve got better coverage at a cheaper price. Granted, improvement doesn’t happen every single time, but in many cases, it’s possible. Contact us to help you look it over.
  4. Valuable, Up-to-Date, Relevant Information: This is one of our big areas of emphasis at Policy Advantage Insurance Services. We know this industry changes. Sometimes quickly. We stay up-to-date with the information that we provide using a number of different strategies. The two big ones: A) Professional Designations (ie: the RHU®/Registered Health Underwriter® and REBC®/Registered Employee Benefits Consultant are the undisputed professional credentials in our industry). B) Information from our partnerships and affiliations (ie: insurance companies, third party administrators, and educational institutions). Companies like Kaiser Permanente, Cigna, United Healthcare, and others are constantly providing us with fresh information that we get out to our client base and readers. We take great pride in providing you with up-to-date info.
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  1. Insurance Company Choices and Options: With a broker, you don’t just choose from one insurance company, you get to choose from many. A broker is like an “insurance store.” This can be very important for a number of different reasons. Physician and hospital networks vary from insurance company to insurance company. Insurance premiums may also vary. The structure and the way that managed care organizations (or MCOs) operate  can also vary considerably. These are all good reasons why it’s a good idea to give yourself some choices when it comes to health insurance companies.

As you can see above, you can “give yourself the advantage” today. Our number one priority are our clients and customers, and helping you navigate the complex world of health insurance and health benefits.

Thanks for stopping by, we hope you found our information to be valuable. Check back at our blog to get further information about funding healthcare. Also, please share with your friends, clients, colleagues, and family. Here are a few of our other information outlets:

Home Page: http://www.PolicyAdvantage.com

Twitter: http://www.twitter.com/PolicyAdvantage

Facebook: http://www.facebook.com/PolicyAdvantage

YouTube: http://www.youtube.com/PolicyAdvantage

Pinterest: http://www.pinterest.com/PolicyAdvantage

Word Press: http://www.policyadvantage.wordpress.com