Small Business Glossary and Definitions

A Premium Only Plan is a group health insurance plan that helps both employees and employers save money on taxes. A premium only plan pays a percentage of the insurance premiums that employees are responsible for and reduces their taxable income by doing so. Reducing their taxable income saves them money on taxes, but it also saves the company money by reducing the amount subjected to payroll taxes. This is a common and widely standard way of offering health insurance benefits to your employees.