A Premium Only Plan (POP) is a type of Section 125 cafeteria plan that allows employees to pay for their health insurance premiums using pre-tax dollars. This approach effectively lowers their taxable income, resulting in tax savings for both employees and employers. While it simplifies the administration of benefits, it also provides flexibility for employers to manage overhead costs. The POP can cover various insurance types, including health, dental, and vision, making it a comprehensive choice for businesses aiming to provide competitive benefits packages.