With almost 40% of small businesses not offering employer sponsored group insurance, millions of working Americans are having to purchase individual and family health policies on their own.  Such was the case with the employees at a company I recently met with.  The business owner explained she had no budget to offer traditional group health coverage for her 15 employees, things were tight enough as it was, but wanted to know if I could somehow help save them money on their premiums which were averaging close to $500/month for each of them.  Not only were we able to save each employee between $1,500 and $2,000 per year, but we also reduced the employer's payroll taxes by about $6,000 which gave her more than enough to put an employer paid group dental plan in place and still come out ahead.   No, the employees didn't suffer a reduction in benefits and, yes, this is perfectly legal.  The employer installed a turnkey (read 'simple') Premium Only Plan (POP), an IRS sanctioned plan governed by the Internal Revenue Code Section 125, and gave the employees an option to pay their health insurance premiums through payroll deductions.  What this meant was, instead of the employees paying their premiums directly to the insurance company, the employer witheld the premium amounts from their paychecks and sent them in to the insurance company on each employee's behalf.   The employees no longer paid FICA, federal, state or local taxes on those witheld dollars, resulting in increases in their take home pay of $125 or more each month.   The $6,000 employer savings came from her reduced matching FICA contributions, money she was all too happy to pass along to her employees by means of providing them with dental insurance.

Any employer can sponsor a POP plan:  Regular corporations, partnerships, S corporations, LLCs, sole proprietors, professional corporations, even not-for-profits.   Even companies with a zero benefit budget can offer a valuable benefit program to their employees while at the same time reducing their own costs.  Truly, a win-win scenario.