Last week Paul in California asked for help
to give his employees some benefits.
One of our tax professionals was nice enough to help.
Hi Eva...
The answer to Paul's health insurance needs is quite simple, actually.
With the help of a knowledgeable, professional, reputable insurance agent,
this Employer (ER) can establish a group plan with an insurance company that
allows each Employee (EE) to choose a plan that best suits his/her needs.
Additionally, the ER can elect a Defined Contribution towards the cost of
the insurance. Meaning that the ER can choose an amount (say, $80, $100 or
$150 or ... ?) that he will contribute towards the cost of health insurance
per employee each month.
That way the ER is able to pre-determine his overhead costs every year.
An EE might opt for a plan with a high deductible and that is HSA compatible.
(Generally, these high deductible plans are quite affordable.)
As you already know I'm sure, the Health Savings Accounts can only be established
when an EE (or an individual) has a qualifying health plan. The ER and the
EE can contribute funds into the HSA on a tax deductible basis. The funds
earn interest tax free and can be used to pay for medical expenses which are
not otherwise covered by the medical plan, including dental work and even
over-the-counter drugs or supplies!
Any funds not used by the end of the year are rolled over into the next
year. The HSA (not the health insurance plan) is owned by the EE and follows
them wherever they go.
Any contribution the EE makes towards the cost of the health insurance can
be made on a pre-tax basis, thereby reducing payroll taxes for the ER and
the EE, increasing the EE's take-home pay, and reducing the cost of Worker's
Comp to the ER.
It's just a win-win-win all the way around!
As to the part-time EE (who works less than half-time), some insurers will
deem that person to be ineligible to participate in group insurance. However,
there is at least one insurer that will allow "part-time" down to 15 hours
per week.
I'd be happy to walk him through the process of obtaining small group insurance.
(Even if he decides to do business directly with the insurer [which I never
recommend! I think it's all too important for consumers to have an advocate
on their side at all times.], I'd still be happy to consult with him.)
Thanks for all you do! Alison Gordon LA, CA
email :
policies at pacbell.net
