Over 2 7 million small businesses the United States do not offer health insurance, but most small businesses want to help cover the cost of health insurance. Where traditional health insurance is not adjusted because of the cost, eligibility or administrative obstacles, there are ways for businesses to help cover the cost of purchased individual health insurance.
But wait. Can help employers still cover the cost of insurance? What about the new rules and reforms?
In this article, we will have two simple options (and consistent) to help employees with health insurance. We will also provide quick facts to help you quickly wrap your head around each option
Option 1 -. Formal Offer a free repayment plan tax
The first option is to set up a formalized health reimbursement plan
Here are some quick facts about this option: ..
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the repayment plan is 100% funded by the employer
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amounts give monthly allowances to eligible employees .
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allowance amounts may vary according to category of employee or family status.
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employees buy their own individual health insurance policy and have access to tax subsidies for the premium, if eligible.
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employees are reimbursed once they submit proof of their premium costs.
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Refunds are employees and tax deductible for the company (authorized under section 105 of the IRS code) tax free.
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reimbursement plan is a group health plan, and is designed to meet applicable federal regulations - including new
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most companies use a third party (such as software for reimbursement of health care) to implement the plan and reimbursement management, compliance and administration. Many services also help employees buy health insurance policies
Read more: How to give employees tax free money for insurance disease
option 2 - taxable Stipend for health insurance
the second option is to provide an allowance (eg an increase or bonus). for employees to use on health insurance
Here are some quick facts about this option:
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employees receive a fixed, taxable allowance to buy health insurance
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employees receive money or not. they buy health insurance (note - with this option, it is important that the company does not ask employees to proof of health insurance, as this would be considered an employer map improper payment).
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employers can simply add money to employee salaries, or use a software service to configure, manage and communicate the benefits. Many services also help employees buy health insurance policies.
For more information on these two options, download our free guide, The Small Business Guide to Individual Insurance reimbursement health.
FAQ - Can we pay just to health insurance for employees directly
No. We wrote about it extensively (more). In short, pay for individual health insurance without a qualified repayment plan causes the employer to "approve" individual health insurance plans, which can lead to ERISA violations. It also causes the payments become taxable income for employees.
In addition, to pay for individual health insurance directly is considered a type of payment of employer's plan. Because the payment of employer plans are not consistent with the new Affordable Care Act reforms, employers may face sanctions for non-compliance from this year.
Conclusion
Just because traditional insurance group health is out of range do not mean small businesses can not help cover the cost of health insurance. With either a tax-free repayment plan or a taxable allowance, health benefits can be achieved.
What questions do you have about these options to cover the cost of health insurance? Leave a question below. We will help you to answer.
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