Is buying group health insurance tax deductible?
Group health insurance can be an attractive benefit for your employees, but it can be a benefit for your business as well. Unlike individual health insurance plans, group health insurance premiums plans are tax deductible under some circumstances. They also tend to be less expensive than individual plans since the risk is spread out over a larger pool of participants.
Employers usually cover half of an employee’s monthly insurance premium, while the employee covers the rest of it. The employee will also cover any costs for his or her dependents, although in some cases the employer may opt to cover a portion of the employees’ dependents’ health coverage as well.
With qualifying group health insurance plans, you will be able to deduct 100 percent of the cost of the monthly premiums, which reduces your payroll taxes. Your employees may also be able to use pretax dollars to pay their share of the monthly premiums, which can make your overall compensation package more attractive to your employees. You may also have the opportunity to offer your employees health care savings accounts, fundable by pretax dollars, as a part of their health care package.
Managed care plans are popular and tend to be quite affordable. HMOs and PPOs are the most popular managed care plans, varying primarily in their degree of flexibility in provider choice. POS plans are managed care plans that include some characteristics of both HMOs and PPOs. Indemnity plans provide their subscribers more freedom or choice but tend to be more costly than managed care.
Business owners with attractive benefits packages can better attract and keep talented employees, and employees with improved access to preventative health care plans may have less absenteeism and better overall health. In the end, providing health options for your employees can be a win-win situation for everyone involved.
Source: Health Care Los AngelesBack to Blog