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Pre-Tax Insurance Premium Plan (PIPP)


PIPP is a Pre-Tax Insurance Premium Plan.  This plan deducts your medical, dental and/or vision plan premiums from your paycheck BEFORE TAXES are calculated and deducted.  This reduces your taxable income which INCREASES YOUR NET TAKE HOME PAY!

All APS employees enrolled in a medical, dental or vision plan are eligible to participate in PIPP.  New benefit eligible employees become eligible when their medical, dental, or vision plans become effective.  Employees are automatically enrolled in PIPP unless they decline the plan by checking “Decline PIPP” when completing the Benefits Enrollment/Change Form.

Usually, benefit premiums are deducted from pay after FICA and federal taxes are deducted, which means premiums are paid with after-tax dollars.  With PIPP, your premiums are deducted from your salary before FICA and federal taxes are calculated.  This reduces your taxable income by the amount of your premiums.  At the end of the year, your medical, dental and/or vision premiums will not be included in your reportable W-2 income (but will show in another box on your W-2), and will not be subject to federal or state income taxes.  PIPP is regulated by Section 125 of the Internal Revenue Service Code. 

If you wish to change your PIPP election for a subsequent year, you can enroll or dis-enroll during the annual APS Switch/Open Enrollment held each October.  The change will go into effect January 1st of the following year.