How Do Small Business Owners Get Health Insurance?


Black Women Entrepreneur who has a Small Business.

So, starting a business or you have a small business and you’re trying to figure out how to get health insurance. You always should have a business plan in place to act as a guide to figure these things out. Well, I’m here to ensure your small business success by giving you some business ideas and resources to help you get some health insurance as a small business owner.


Here are 5 ways to get small business health insurance and here are the ways:



Spouse Employer Group Plan


So, this can be a little tricky because as we all know small business owners are always trying to find business deductions. If your spouse’s employer offers to pay (subsidized) part of their family health plan and they're eligible to participate in the plan, as a small business owner you will lose the self-employed health insurance deduction.


You may be asking what do you mean by subsidized. This is when your monthly health insurance payments are reduced by your spouse’s employer contributions.


*Nugget: Your self-employed health insurance deduction for the insurance premiums cannot exceed the amount of your salary from an S-Corporation.


Individual Marketplace


The individual marketplace is also known as ObamaCare or Healthcare.gov.


  • Open Enrollment usually runs from November 1st to December 15th.

  • You may qualify for a Special Enrollment Period if there are: changes in your household number, changes in your residence, your loss of health insurance, you’re leaving incarceration, or you became a new U.S. citizen.

  • Don’t forget to make your monthly health insurance payment. Your health coverage won’t start until your first payment is made.

  • Make sure if there are changes to the number of people in your household, your income whether it increased or decreased, or you moved to a different state to call the marketplace to update your information. This update may increase or decrease your monthly health insurance payments. If you don’t call to make these updates you could owe money back to the government when you file your taxes.


*Nugget: Health insurance through the government (Healthcare.gov) affects the premium tax credit on your tax return. The premium tax credit is a refundable tax credit designed to help eligible individuals and families with low or moderate income afford health insurance purchased through the Health Insurance Marketplace, also known as the Exchange. The size of your premium tax credit is based on a sliding scale. Those who have a lower income get a larger credit to help cover the cost of their insurance. When you enroll in Marketplace insurance, you can choose to have the Marketplace compute an estimated credit that is paid to your insurance company to lower what you pay for your monthly premiums (advance payments of the premium tax credit, or APTC). Or, you can choose to get all of the benefits of the credit when you file your tax return for the year. If you choose to have advance payments of the premium tax credit made on your behalf, you will reconcile the amount paid in advance with the actual credit you compute when you file your tax return.



Husband and Wife Small Business Owners

Employee-Spouse 105-HRA


This is not a health insurance plan but it is a business tax strategy that I couldn’t help but include in this article.


There are two requirements that must be met.


  1. You can only have one employee. The employee should be a W-2 employee.

  2. Your business must operate as one of the following: Sole Proprietorship, Partnership, Real Estate Rental Business filing a Schedule E, Farm Business, C-Corporation.

Documentation is key:

  • Have your one employee paid through a payroll service.

  • Keep a timesheet for the employee.

  • Have the employee pay all medical expenses from their personal account.

  • Require your employee-spouse to submit expenses for reimbursement monthly at a minimum.

  • Maintain a formal plan document.

In a nutshell, the 105-HRA turns personal medical expenses into business deductions.


Small Business Health Options Program (SHOP)


This program allows you to have a group plan with only one employee.


To offer the Small Business Health Options Program (SHOP) health insurance to your employees, your business or non-profit organization must meet 4 requirements:


  1. Have 1-50 full-time equivalent employees.

  2. Offer coverage to all full-time employees.

  3. Enroll at 70% of the employees you offer insurance to.

  4. Have an office or employee work site within the state whose SHOP you want to use. This includes a home office.


A Small Business Health Options Program is usually the only way to take advantage of the Small Business Health Care Tax Credit. The Small Business Health Care Tax Credit can save eligible employers up to 50% of their employer contribution.


Click here to learn more about this program.


Trade or Professional Organization Group Plans


Workers from different trade industries.

It is possible that you can get health insurance through a trade or professional organization. Here are some examples:



Were you able to find small business health insurance another way? Which of the 5 ways worked best for you and which one didn’t work well for you?


Share your suggestions and experiences in the comments below! We’d love to hear your thoughts.


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