POP Definition

[Guest StephJT]

I'm new to working with Cafeteria plans -

My understanding of a POP (Premium only plan, premium payment plan) is that it is a plan that offers only group insurance coverages.

Is a plan still a POP if it offers, in addition to group health insurance coverage, individual polices such as AFLAC products, individual supplemental insurance policies, where the employer is deducting premiums and forwarding them to the provider (though it may not make a difference)? My concern is regarding nondiscrimination testing, whether the inclusion of individual policies means a plan is not a POP, and therefore not eligible for the safe harbor eligibility test available only to POP's.

What about the inclusion of PRA's (Premium Reimbursement Accounts) offering reimbursement of individual major medical health insurance premiums upon receipt of proof of payment? I realize there is debate whether this type of benefit should even be included in a cafe plan, but my question is in regard to the POP definition. Does including a PRA make a POP plan no longer a POP?

Thank you for your assistance.

[Guest Assurecor]

I'm new to working with Cafeteria plans -

My understanding of a POP (Premium only plan, premium payment plan) is that it is a plan that offers only group insurance coverages.

Is a plan still a POP if it offers, in addition to group health insurance coverage, individual polices such as AFLAC products, individual supplemental insurance policies, where the employer is deducting premiums and forwarding them to the provider (though it may not make a difference)? My concern is regarding nondiscrimination testing, whether the inclusion of individual policies means a plan is not a POP, and therefore not eligible for the safe harbor eligibility test available only to POP's.

What about the inclusion of PRA's (Premium Reimbursement Accounts) offering reimbursement of individual major medical health insurance premiums upon receipt of proof of payment? I realize there is debate whether this type of benefit should even be included in a cafe plan, but my question is in regard to the POP definition. Does including a PRA make a POP plan no longer a POP?

Thank you for your assistance.

This is a great question and cannot believe no one responded. I have the same question and obviously so does everyone else. Is anyone out there who knows the answer to this question?

[leevena]

The original question does not provide enough specific details to give a qualifed answer, so please keep this in mind when reading.

The definition of a POP is tied to the type of expense that is being sheltered, and in this situation it would be any eligible premiums that the law allows and does not include any of the flexible (dep care or unreimbursed medical) benefits. A few years ago the IRS made non-discrimination testing for POP plans easier by only requiring the eligibility portion of testing and eliminated the need for the contribution/benefits and concentration testing. So, if all employees can participate, and if they can all elect the same salary reductions for the same benefits, the plan meets the test.

I was unaware of whether the incluse of a premium reimbusement account was all that controversial, sorry. Why?

Hope this helps.