Health Insurance Benefits

Unless you have a spouse with health insurance through their employer, you are probably in the market for a reasonable medical policy.

Self Employed, LLC's and S Corporations

The best option for these entities is a high deductible health plan (HDHP) with a health savings account (HSA). Beginning in 2005, the minimum deductibles are 1100$ for single coverage and 2200$ for family coverage. The premiums are 100% deductible for self employed individuals. The added benefit is the Health Savings Account. This is similar to the Flexible Spending Accounts that many employers offer in that you are allowed to contribute to a fund that reimburses you for any out of pocket health expenses. These contributions are limited to 1000$-2600$ for the single coverage and 2000$-5100$ for the family coverage, depending on the actual deductible chosen (as of 2004). The contributions to HSA's can be rolled over to the next year and the earnings are exempt from taxes.

C Corporations

As a C Corp you can establish a salary reduction program for health insurance and flexible spending accounts. The amount of these benefits are not included in your gross income and deductible to the corporation.

Links

IRS FAQ on High Deductible Health Plans (PDF)

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