Small Business To-Do: Investigate Corporate Health Insurance Plans
We’ve got just about three weeks before November 15 — the day we have to make final decisions about health insurance for ourselves and our employees.
While you’re not required to offer healthcare coverage if you employ less than 50 people, investigating a group plan makes sense even if you employ just one person.
Because corporate plans — even small group plans — typically deliver higher levels of coverage at lower premiums and deductibles than individual policies. You’ll be required to pay at least 50% of qualifying employee premiums for ACA-compliant health insurance plans.
3 Ways to Offer Health Insurance to Employees
There are three ways to provide health insurance coverage to your team:
- Organize corporate small group coverage through your state exchange, via a broker or payroll company, or directly with an insurance company.
- Join a professional employer organization (PEO). The top benefit of joining a PEO is access to a selection of discounted large group insurance plans for two or more employees.
- Investigate the Qualified Small Employer Health Reimbursement Arrangement (QSEHRA, pronounced cue-SARA) as an alternative to offering health insurance. You can help employees pay their individual insurance premiums and everyone gets a pre-tax benefit. Learn more at healthcare.gov.
2 Ways to Reduce Health Insurance Premiums
No matter which option you choose, the way you pay for coverage can reduce your premiums. Here are two tactics to use pre-tax money to pay for your insurance and may make your premiums effectively up to 36% cheaper:
- If you’re a solopreneur, pay for your individual or family health premiums through your corporate bank account or credit card. Health insurance is a qualified business expense. Note, if you’re an S-corp owner / employee with no other employees, you’ll need to use an individual plan.
- Most corporate health insurance benefits paid all or partially for yourself or employees are tax-exempt from the first dollar as qualified business expenses.
Always check with your CPA about the tax implications of any move you make. Don’t have a CPA? Find one here.