Section 125 Premium Only Plans – Taking the Load Off of Construction Contractors

Construction contractors, be they relatively small and independent or massive and employed organizations dealing with titanic projects heavily, face a great number of logistical challenges before they try the field. Coordinating and planning risk management with subcontractors, providing design teams with schedule and budget updates, and haggling over deadlines with online marketers provide the backdrop to many contracted projects. Put into the bustle of client interactions may be the barrage of Federal and State legislative requirements. Construction contractors nationwide play a delicate game, balancing obligations between employee compensation, liability insurance, worker’s comp, and, in some full cases, pollution and environmental insurance. All considered, construction contractors sponsoring medical health insurance for their employees when confronted with the countless and varying obligations they manage deserve some help where their finances are worried. Section 125 Premium Only Plans or POP can ease the burdens of medical health insurance premiums and promote the success of subscribing construction contractors.

The financial tolls Premium Only Plans help offset have weighed heavily on the financial stability of several construction contractors during the last several years. Based on the Oregon Healthcare Reform Information Organization, contractors nationwide have reported the average 160% increase to the price tag on insurance costs. Sadly, the rise in prices have not occurred without consequence. The dramatic rise in premium cost has, based on the coverage organization, forced construction contractors to:

Lower the wages they pay their workers
Change the scope of these business to nonconstruction activities, eliminating the expense of liability insurance thereby
Walk out business altogether

Construction contractors may use lewis bins in order to avoid compromising their businesses and save swaths of capital in annual FICA taxes. Premium Only Plans allow their workers can donate to their healthcare premiums before taxes are deducted from their pay, and the tax free nature of the contributions can save contractors around 7.65 percent in annual taxes. The savings can mean several hundred dollars each year.

Premium only plans not merely drive the expense of sponsoring medical health insurance plans down for contractors, rendering them manageable as tax-savings are realized increasingly, they dramatically reduce the impact employee contributions have on employee finances also. Because employee contributions are deducted pre-tax, employee collect pay is increased on a full month to month basis. These savings could be applied to a variety of health plan benefits, so employees are able to subscribe to a far more diverse selection of dependent and personal benefits.

The costs connected with initially setting up reduced only plan are often returned during the period of the initial year by the savings accrued.

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