Compliance Solutions

Premium Only “POP” Plan

A POP is a Section 125 Cafeteria Plan that allows employees to pay for their qualified employer sponsored premium payments on a pre-tax basis. Proficient Benefit Solutions offers seamless administration of POP plans.


Do You Need a POP?

Employers must have a POP document in place to legally allow employees to avoid paying taxes on health insurance and other benefit programs. Benefit Solutions prepares the document that satisfies this requirement.  Premium Only administration, including document preparation, is also included as an integrated part of our FSA services.

Why Use Benefit Systems Inc?

BSI doesn’t stop at document preparation. We also provide you with support for the entire plan year. Our expert Plan Services department is able to assist you with questions related to Premium Only Plans.

  • Summary Plan Description (SPD) preparation
  • Plan Document preparation
  • Plan amendments, if applicable
  • Completion of Non-Discrimination Testing limited to Key Employee Concentration Test
  • Client support throughout the plan year


ERISA requires all private sector employers, regardless of size, to distribute a Summary Plan Description, (SPD) to all plan participants. The SPD must describe all of the plan rules and benefits; as well as provide key information about the plan. (For example, the plan number, employer’s Tax ID, name and address of the plan’s legal agent, etc…)

A Wrap plan is a plan document/summary plan description that either wraps around a single benefit or bundles multiple benefits under one ERISA plan number. Wrap plans are an easy way to create the companion ERISA language to the insurance certificates so that when distributed to participants together the plan can remain compliant with ERISA plan document and SPD requirements.

Wrap documents may also be used by employers to consolidate multiple employee welfare benefit plans into a single plan, commonly referred to as an “umbrella” or “mega-wrap” plan. Consolidating employee welfare benefit plans into a single plan could reduce the costs associated with filing multiple annual reports, distributing multiple summary annual reports, and amending multiple plans in response to legislative or regulatory changes.

Benefit Systems Inc., will ensure your plan is compliant with all requirements. Our services include:

  • Plan Document Preparation
  • Summary Plan Description Preparation
  • Plan Amendments
  • Record Retention

Non-Discrimination Testing

 Current regulations require Section 125 Plans (Premium Only and FSA plans) to pass Non-Discrimination Testing (NDT). The goal of this testing is to ensure that those Key and/or Highly Compensated employees identified by the employer, are not participating in the Section 125 plan at a disproportionate rate.

 As part of FSA and POP administrative services, Benefit Systems, Inc has always conducted two crucial Non-Discrimination Tests upon request: the 25% Key Employee Concentration test and the 55% Average Benefits test of the Dependent Day Care program.

For those clients who would like us to perform a more comprehensive test of the Section 125 plan we have an additional option that incorporates a total of nine tests. These nine tests are grouped together and comprise one test “package”. Some of these tests address the eligibility and availability of benefits, while other tests evaluate and compare the actual benefits elected (utilization).

Each Comprehensive Test Package includes

The Section 125 Cafeteria Plan

  1. Eligibility Test
  2. Contributions and Benefits Test
  3. Key Employee Concentration Test

Health FSAs

  1. Eligibility Test
  2. Benefits Test

Dependent Care FSA (DCAP)

  1. Eligibility Test
  2. Contributions and Benefits Test
  3. More-Than-5% Owners Concentration Test
  4. 55% Average Benefits Test

5500 Reporting

 Form 5500 annual reporting is used to report employee benefit plan’s annual information to the Department of Labor. If the plan is subject to ERISA and has 100 or more participants, the form is required each year, no later than the last day of the seventh month after the plan year has ended.

 Penalties for failing to file 5500 reports can be significant and are increasing. At BSI, we make it easy to file every year and to file on time. We offer a streamlined and efficient process.

 BSI can access past 5500 filings and can also quickly provide:

  • DOL/IRS form 5500 and associated schedules
  • Summary Annual Reports (SAR)
  • Other related forms (such as Form 5558)

 Interested in pricing of these services? Let us build a proposal for you.  Send us your request here. (link to