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arnguy said:
Yeah, this was going to something that I was going to add to the thread...but it appears I was beat to the punch.
So...I can say..yeah..that's how it started =).
"Health Insurance Isn't All It's Cracked Up to Be"
- Thread starter Golddoor
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- health insurance
Yeah, this was going to something that I was going to add to the thread...but it appears I was beat to the punch.
So...I can say..yeah..that's how it started =).
- 2,370
Yes an employer can fun an HSA account.
If he can take the funding as a cost of doing business expense is a question for his accountant. The employee gets the tax benefit since the dollars are not taxed unless used for other then medical purposes.
Lots of opportunity there...
If he can take the funding as a cost of doing business expense is a question for his accountant. The employee gets the tax benefit since the dollars are not taxed unless used for other then medical purposes.
Lots of opportunity there...
- 477
moonlightandmargaritas said:
Tax implications, if I'm not mistaken. I don't think you can deduct healthcare premiums unless you're actually self-employed, but I could be wrong.
An employer can give a cash bonus for the purpose of buying health insurance, but it has to crank through the tax mill before filtering down to the employee. That means FICA, SUTA, FUTA and other taxes in addition to WC premiums.
If the employer pays for individual health insurance there are potential legal issues there where the plan could be construed to be an ERISA plan. If that happens there are more issues than just the tax hit.
If an employer wants to provide coverage, either on all employees or some, but does not want a group plan, the easiest way is to fund the HSA for all who have (or purchase) a qualified HDHP. You avoid the ERISA issues and some of the tax implications.
Joe owns an oil & tire business with 10 employees. He wants to provide health insurance but can't afford to bite the bullet and pay a lot of money plus committing to future premium increases. Instead he proposes to fund the HSA by $500 for single employees & $1000 for married employees. The HSA is funded on a monthly basis for all employees who either show proof of an existing HDHP or purchase one through PRD. (Ideally, the agent will set up the HDHP on PRD when presenting this plan to the employer).
Employees with $1050 deductible the 100% get half their medical bills paid by either the carrier or employer funded HSA; married employees with $2100 deductible then 100% do likewise. Those who opt for higher deductibles have potentially more exposure.
The downside is, those who are uninsurable are SOL.
If the employer pays for individual health insurance there are potential legal issues there where the plan could be construed to be an ERISA plan. If that happens there are more issues than just the tax hit.
If an employer wants to provide coverage, either on all employees or some, but does not want a group plan, the easiest way is to fund the HSA for all who have (or purchase) a qualified HDHP. You avoid the ERISA issues and some of the tax implications.
Joe owns an oil & tire business with 10 employees. He wants to provide health insurance but can't afford to bite the bullet and pay a lot of money plus committing to future premium increases. Instead he proposes to fund the HSA by $500 for single employees & $1000 for married employees. The HSA is funded on a monthly basis for all employees who either show proof of an existing HDHP or purchase one through PRD. (Ideally, the agent will set up the HDHP on PRD when presenting this plan to the employer).
Employees with $1050 deductible the 100% get half their medical bills paid by either the carrier or employer funded HSA; married employees with $2100 deductible then 100% do likewise. Those who opt for higher deductibles have potentially more exposure.
The downside is, those who are uninsurable are SOL.
- 14,808
Yep, that one uninsurable person has always toasted my deal for small business owners regarding funding individual HSA accounts. It all looks pretty until I find that one employee who's diabetic. Then it's over.
The ugly truth is it's near impossible to find a group of 10 insurable people. Then it gets worst when you consider that employees also want to add their families.
I've even lost deals over the "lemming" mentality which is "we might as all go off the cliff." Case in point was a few months back I had a small group of 4 and everyone wanted individual coverage. Come to find out one lady was uninsurable which caused everyone to back out of the deal.
The ugly truth is it's near impossible to find a group of 10 insurable people. Then it gets worst when you consider that employees also want to add their families.
I've even lost deals over the "lemming" mentality which is "we might as all go off the cliff." Case in point was a few months back I had a small group of 4 and everyone wanted individual coverage. Come to find out one lady was uninsurable which caused everyone to back out of the deal.
- 7,790
Doesn't the fact that it is nearly impossible to find a group of 10 insurable people make the case for writing group insurance? How else can a group such as somarco mentioned or John Petrowski mentioned be sold health insurance? I know that John believes in writing Individual Health policies as the way to go, but I believe a situation may sometimes call for group health as the only alternantive. Comments, please. :roll:
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- 1,598
I think that you are conjoining two seperate issues. John and Somarco would both write a group of ten people as a group. However, it takes a lot less work to write individual policies than group policies, and the commission is much better, thus making it a better market to focus on.
However, they would both agree that with the situation as it currently stands, any time you have an uninsurable, or a group past 4 or 5 interesteds, you write them as group.
However, they would both agree that with the situation as it currently stands, any time you have an uninsurable, or a group past 4 or 5 interesteds, you write them as group.
The issue with small group, especially a virgin one, is getting the employer to belly up to the bar for $150/month or more for each employee. Employers want to pay as little as possible, which then hurts participation, sometimes making it impossible to write the group plan.
Anticipating that you go in with individual policies on a list bill, using a HDHP and the employer funding the HSA. At least that way you get SOME folks covered (and make a few shekels for yourself) rather than earning nothing and wasting everyone's time.
Sometimes you can write a carve-out group on the management or salaried people and list bill on the rummies.
Anticipating that you go in with individual policies on a list bill, using a HDHP and the employer funding the HSA. At least that way you get SOME folks covered (and make a few shekels for yourself) rather than earning nothing and wasting everyone's time.
Sometimes you can write a carve-out group on the management or salaried people and list bill on the rummies.
- 14,808
There's money is everything - and lots of it. You simply have to concentrate on what your heart's into. I personally am not a fan of group coverage however I write it when I have to.
In any case - I have agent friends of mine making six figures selling everything from life to annunities to group health to individual coverage.
My issue with groups is the time is takes to land a group and the commissions are very low. You need to nail a mid-sized group to make a lot of money and middle market is a tough nut to crack.
In the mean time I can have kids plaster up 2,000 doorhangers and write two quick deals per week with almost zero effort.
In any case - I have agent friends of mine making six figures selling everything from life to annunities to group health to individual coverage.
My issue with groups is the time is takes to land a group and the commissions are very low. You need to nail a mid-sized group to make a lot of money and middle market is a tough nut to crack.
In the mean time I can have kids plaster up 2,000 doorhangers and write two quick deals per week with almost zero effort.
- 7,790
Thanks for the input guys. Arnguy.
