Small businesses looking to offer health benefits to recruit and retain the best employees. But there is a problem. traditional insurance provided by the employer health is too expensive. As a result, only 54 percent of small businesses offer health insurance today.
For the cost of health benefits under control, many small companies offer a plan Article 105 reimburse employees tax free for individual health insurance reimbursement
Since small companies evaluate this approach, a common question is.? Who can participate in a plan of Article 105
Note - This question was raised during our recent webinar "? Can free premium tax refund work for you" If you want to download on demand webinar and slides, click here.
ground rules for a plan of Article 105
employees and the dependent participation is based on three factors:
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Does the employee meets the criteria of the class of employees
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has? the employee meets the waiting period?
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If the employee is also the owner, not their company's filing status is then used to receive reimbursements tax-free?
employees Classes
With a plan of Article 105, the employer shall establish eligibility criteria defining one or more categories of employees. classes of employees may be based on bona fide job criteria such as job role, location or hours worked per week. In addition to defining the eligibility criteria, employers can use classes of employees to provide the level of services to different categories of different employees.
For example, an employer might use classes of employees to offer $ 500 / month for full-time employees and $ 0 / month for part-time employees
Read more :. Use of classes of employees with redemption premium to recruit and retain key employees
waiting period
In addition to the eligibility of the class of employees, employers may set a [1945007période] wait (up to 0 days) .
The waiting period is the time that must pass before otherwise eligible employees can participate in the health plan. Under the new health reforms, the maximum waiting period is 0 days. The waiting period may vary according to the category of employees.
For example, an employer may set a 30-day waiting period for full-time employees and 60 days for part-time employees.
owner status
Finally, we often receive questions about the owner of the company participating in a plane 105 of the section.
Business owners can participate, although eligibility for tax benefits depends on the business structure. C-corporation owners can fully participate in the Plan section 105 and receive refunds tax free. S-Corporation owners (> 2% shares), individual companies and partners can participate in the plan, but have limited eligibility for tax benefits
More: Section 105 qualification Plan - By. Status of the owner
Conclusion
Who can participate in a Section 105 Plan? It's simple. The employer defines the eligibility with employees classes and waiting periods. Employees who meet these criteria are eligible to participate. In addition, homeowners are eligible to participate in a plan of Article 105, but the tax benefits vary according company's filing status.
What questions do you have about participating in a Section 105 plan for reimbursement of medical expenses? Let us know in the comments below.
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