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How Should A 10 Employee Business Offer Health Insurance To Employees?

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How Should A 10 Employee Business Offer Health Insurance To Employees?

Postby Ollaneg » Tue Aug 08, 2017 11:48 am

Our employer is wanting to find a win-win situation with our health insurance. Employer wants to move away from group insurance to reimbursement of individual insurance - a defined contribution plan.

Employer Plan Preferences

1. Offer to reimburse only one specific individual HSA plan up to $500 per month.

2. Contribute $1,000 to each employee's HSA.

Questions:

1. Is this arrangement legal?

2. Does the employer get any tax benefit?

3. Is the arrangement non-taxable benefits to the employee?

4. Is there a better way of doing this for both employer & employee?

Thanks!
Ollaneg
 
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How Should A 10 Employee Business Offer Health Insurance To Employees?

Postby lincoln » Tue Aug 08, 2017 3:37 pm

It is not legal for a person to have only an HSA.
Contributions to an HSA are allowed only if the person also has a high deductible health plan (insurance).
lincoln
 
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How Should A 10 Employee Business Offer Health Insurance To Employees?

Postby Cowen » Tue Aug 08, 2017 11:33 pm

1. Nope

2. Nope (see #1)

3. Nope (see #1)

4. Yes

Individual health plans are no longer deductible to an employer.

We just flipped a 12-person company from group to individual.
The employee can pay a higher salary to cover the benefits that the employee gets on their own.
It still ends up tax deductible to the employer plus the additional FICA.
The employee is now faced with taxes on that amount of income.
However, we usually have the employer provide additional benefits to help offset that AND get the employee a better plan.
IF the employee qualifies for subsidies AND your health insurance exchange is functional in your state, then you can apply for subsidies as well.

The employer gained a $150/month savings per employee.
The employees got insurance that was cut by 20% in cost which helped when paying for dependents.
One employee saved $500 per month by going from $1000/month to $500/month in costs....with better overall coverage.

Any good health insurance broker can do this.
Cowen
 
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How Should A 10 Employee Business Offer Health Insurance To Employees?

Postby ohcumgache » Sat Aug 12, 2017 11:13 pm

I tend to agree with your employer's philosophical position on this issue.

That being said, many things have changed since the implementation of the Affordable Care Act.
Your employer will want to ensure that they are in compliance.
For example, is your employer providing new hires written notice of the new health insurance marketplace? It's REQUIRED.

In addition, your employer can get up to a 35% tax credit on providing medical insurance if it's done according to the ACA standards.


There really is a lot of change happening here and since I am not a CPA I'm not going to go into a whole lot of specifics.

Here is a page about the ACA requirements for businesses with UNDER 25 employees.
http://www.sba.gov/content/employers-wit...
ohcumgache
 
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How Should A 10 Employee Business Offer Health Insurance To Employees?

Postby Deryk » Sun Aug 13, 2017 7:50 am

To an extent, this will depend on your state, but Insurance Pickle provides a solid explanation here.
Deryk
 
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How Should A 10 Employee Business Offer Health Insurance To Employees?

Postby Devisser » Sun Aug 13, 2017 6:49 pm

You can't have an HSA, without a qualified high deductible plan at the same time.


To your direct questions:

1.
No

2.
No

3.
No

4.
Maybe, but it's probably not going to be cheaper for the employer OR the employee.
Devisser
 
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Joined: Sat Apr 05, 2014 9:12 am


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