In 2005, the state of Utah recognized the need for reforms in the health care industry, and proceeded to make massive reforms in the system. Such initiative eventually led to the passing of the important legislation HB 133, also known as the Utah Health Exchange, in 2008.

So what is the Exchange? It’s a web-based marketplace where consumers can choose from among many different health care options based on what they need. Originally rolled out in January 2010 on a pilot program, January 2011 launched the first enrollment opportunity for most small employers. It is reported that as of March 7, 2011, about 83 employer groups and 2,534 individuals have successfully enrolled in the Utah Health Exchange.

Basically, the Health Exchange is a contribution program. Businesses enroll in the Exchange through a broker or tax advisor of their choice. The professional will guide the company’s employees of the options they have and the benefits they choose under the program. Enrollment is essentially done on a web-based platform designed for health care shopping and enrollment.

Rules for Participation If you want to be qualified for the program, take note of these policies. Your business must have 2 to 50 employees, 75% of whom should be Utah residents. Then you need to complete the application form online and then submit the required documentation. As soon as an offer is in place, at least 75% of eligible employees must participate. Once you’ve applied, you’ll work directly with your broker or advisor to walk you through the process.

What about a Section 125 Plan? In order to participate in the Utah Health Exchange, employers are required to provide payroll deduction on a pre-tax basis through a Section 125 Plan. This document allows the employee portion of the premiums to be deducted completely pre-tax.

The major benefit of a Section 125 Plan (also known as a cafeteria plan) is its tax-advantage status. Because premiums are deducted pre-tax, the participants’ taxable income are significantly lowered. And once the taxable income goes down, so do the FICA and Medicare taxes. The employer gets a benefit, too: a decrease in the employee’s taxable income can lead to a reduced employer share of FICA and Medicare taxes and even FUTA and state taxes.

What is the Default Plan? Employers and tax advisors must choose the most appropriate health plan for the company’s employees, and have them undergo enrollment to this plan, unless:

1. The employee opts for another health plan under the Exchange program. 2. The employee chooses to waive his right of availing of the plan and secures health coverage outside the company. 3. The employee specifically declines coverage in the health benefit plan.

Whether you have a business in the state of Utah or outside of it, it’s high time you provide your employees something they can benefit from, and give your company substantial tax savings in the process! Best of all, this expertise and support for your Section 125 POP Plan is available to you for just $99 a year! Drop by at at http://taxfreepremiums.com to find out just how much tax savings you can realize.