Premium Conversion is a tax-savings benefit under Sec. 125 of the Internal Revenue Code.
It enables employees to save both FICA (7.65%) and Federal Income Tax (15-35%) on their portion
of insurance premiums that are deducted from their paychecks. Paying for insurance premiums with
pre-tax dollars can significantly increase the take home pay for employees.
Participant Tax Savings Illustration
Premium Conversion allows the following insurance premiums to be deducted pre-tax: