Question: Do you have to have a cafeteria plan for health premiums to be pre-tax?
Answer: Yes. A version of the Section 125 “cafeteria plan” can be designed for premiums only. This single purpose plan is referred to as a Premium Only Plan or POP plan. With a POP plan in place employers may deduct the employee’s portion of the company-sponsored group health insurance premium directly from said employee’s paycheck before taxes are deducted. POP plans cannot be used to pay individual health insurance premiums.