Benefits of a Group policy
Are there benefits to having a group policy as a small business owner?
As a small business you already have the ability to write off your health insurance premiums as a tax deduction. However, there are other deductions you can include with a group health insurance plan as long as you contribute to the monthly premiums.
When you contribute to the employees’ premiums, the payments are not counted as wages and therefore are not subject to medicare, social security, FUTA taxes, or federal income taxes.
This means that you have the ability to write off your employees’ monthly premiums as well as yours as long as you are also paying a portion of theirs. I’m not saying you have to pay 100% of your employees’ premiums (I’m sure they would love that) but, what I am saying is you can write off as much as you pay.
Example: You have 5 employees all with premiums of $400 a month. If you pay 50% of their premium, then you can write off $1000 a month or $12,000 a year as a business expense.
The other major advantage to having a group health policy that you contribute to is employee retention. Keeping employees these days is almost a competition. Providing a group health insurance plan is just an extra incentive for them to stick around.
Call or email us to day to learn more about the right group health insurance policy for your small business!