Unfortunately, we expect health insurance premiums to take substantial jumps over the next year or two. Since everyone will be required to carry approved coverage, the potential impact to business owners is quite large. Here are some strategies you may want to consider as a way to keep your costs down.
If you’ve been doing without regular check-ups, flu shots, etc., you now have access to health insurance to cover that kind of preventive health care immediately even with a high-deductible plan that has premiums on the low end. New plans don’t leave you with a co-pay for these services, either.
In case a pre-existing condition has blocked you from getting any coverage, Pre-existing Condition Insurance Plans have been set up that will cover you after you’ve been denied coverage for six months. Subsidies for these plans are scheduled to stop in 2014 when health insurance companies will be required to accept applicants with pre-existing medical conditions.
Benefits and Premiums Have Risen
The Affordable Care Act removed lifetime coverage limits so a major illness doesn’t carry the same threat of medical bankruptcy so prevalent in the past. Annual limits are being phased out and will also be eliminated in 2014. More coverage means higher premiums, but there are ways for the self-employed to save on health care expenses.
Two Tax Strategies to Consider
1. Investigate small business health care tax credits. If you provide health insurance to no more than 25 workers, you may qualify for a tax credit for your health insurance expenses.
2. If you have employees, or are married, consider setting up a Health Reimbursement Arrangement, or HRA. This would enable the business to reimburse for medical expenses and health insurance premiums. Since employees may qualify for a subsidy on individual health coverage, this could be a much less expensive way for them to obtain benefits than through group health insurance coverage. Anything the business reimburses is considered a tax-free fringe benefit. And if you are setting it up just for your spouse, you can run all the family’s medical and insurance expenses through the business, lowering your tax bill by potentially thousands of dollars.
You have until the end of December to start an HRA for 2012, and it’s a lot simpler than you’re probably thinking. We’ve done all of the hard part for you. All that’s left is to answer a few questions, let one of our experts draw up your paperwork and go over it with you. It’ll be that quick and easy every year, too, because you’ll get paperwork to just hand to your accountant or CPA. More information on HRAs, including quick online applications, is available at http://www.HSAforAmerica.com/HRA.htm.