How does SBP Work?
Everyone Saves with the Shared Benefits Plan™ (SBP)
Through provisions of Section 125 of the Internal Revenue Code, your employees may elect to pay their portion of group health premiums on a pre-tax basis. This option reduces your employees' gross wages by the same amount they contribute to the benefit plan on a pre-tax basis. And, because these dollars are considered to be employer expenses, your company will save on payroll taxes and Workers' Compensation premiums.
In addition to the savings incurred by the business, your employees can increase their take-home pay! By paying their health insurance premium through pre-tax contributions, employees decrease their taxable income which also lowers their Federal and State income and social security taxes.
The Shared Benefits Plan also allows employees enrolled in a HSA-Compatible High Deductible Health Plan to contribute to a Health Savings Account on a pre-tax basis; saving them even more.
[Please note that if disability premiums or life insurance premiums for coverage over $50,000 are paid with pre-tax dollars, any benefits paid out will be taxable to the recipient.]