Family-owned since 1982, based in Santee. CBIS sets up group health, dental, vision, life, disability and Section 125 plans for California employers, from the owner plus 1 employee to groups of about 250, with a named CBIS contact for each account.
When an employee pays their share of premiums pre-tax, they save on payroll taxes and income taxes, and the employer saves on its matching payroll taxes for each employee who takes part. Employers who set up a new voluntary benefits program through CBIS may qualify for Section 125 premium-only plan setup at no added cost. Eligibility and terms apply; ask us for details. Otherwise, there is a fee for the plan document, so ask us for pricing.
How employees benefit from a premium only plan
Employees save on taxes for premiums paid pre-tax. The tax savings are on federal and state income taxes, as well as Social Security and Medicare (FICA) taxes, on money used to pay for their portion of insurance premiums. Employees’ take-home pay can go up, which can help lower the cost of providing health coverage for family members.
How employers benefit from a premium only plan
Employers can save on the matching Social Security and Medicare taxes (7.65%), and sometimes federal and state unemployment taxes. Depending on the state and the carrier, workers’ compensation costs may also be affected, so ask your carrier.
Who can participate?
Employees of regular corporations, S corporations, limited liability companies (LLCs), partnerships, sole proprietors, professional corporations, and not-for-profits can all lower payroll taxes by setting up a Section 125 Premium Only Plan. While the Code prohibits a sole proprietor, partner, members of an LLC (in most cases), or individuals owning more than 2% of an S corporation from participating in the Section 125 POP, owners may still benefit from the savings on payroll taxes by sponsoring the plan for their employees.
CBIS is not a tax advisor; check with your CPA or tax professional.