Health Insurance Coverage for Yourself and Employees
Some midwives will not have to worry about this. Their partner has the family insurance coverage at their job or small business where insurance coverage won’t be offered. For many midwives, they are the health insurance coverage for the family and need to have the midwife business cover that expense versus buying at the government market place. Have your business pay for the health insurance prior to taxes versus your hard earned income already being taxed cover that cost. Even if your health insurance is covered by a husband, looking into a health saving account, health reimbursement, or flex spending account isn’t a bad idea. Health care is very expensive and will only continue to go up in costs. Use your money wisely to pay for these services.
With the Affordable Care Act, midwives need to know as business owners what we have to cover for employees like taxes, workman’s comp, and health insurance. Small businesses, under 50 full time employees, are exempt from having to provide health insurance to staff. I only know a few midwives that actually offer health insurance to their team. You can always offer health insurance if you need coverage, but be aware that if business pays 100% for your insurance premiums, that has to be done for all full time employees at same level. There is a loop hole to this rule by making yourself the only employee of the practice and everyone else independent contractors (always speak with an accountant and lawyer to make sure your state allow strategies I have used in the past).
There are a few perks that midwife business can offer even if it isn’t health insurance directly. Each staff member can be awarded a flex spending account. I am not the biggest fan of them for myself but work great for business budgets since each year funds contributed are lost if not used by staff (business just keeps funds). My favorite are Health Savings Accounts.
If you have a high deductible insurance plan (individual deductible minimum $1500 and family deductible $3,000), this option is available for you. In 2019, government allows up to $3500 individual and $7000 family tax free money to be used for medical related expenses. That include any alternative therapy that your health insurance won’t cover like chiropractors, home births, and over the counter medicines. If your family is healthy and contributed funds aren’t used, it will roll over each year and never lost. Many banks have a health saving account that can be opened. Some will give you a debit card or check book to pay for medical bills.
US Bank gave us a nice online access system that I could mail checks directly from their website to my providers or myself if I bought something at the store. I had an electronic transaction of all funds used. Keep all receipts for 7 years if ever audited. I personally believe best way to save up money for health related expenses tax free in and tax free out for medical expenses (whether you own a business or not).
If you have a year with many large medical expenses, like over $5,000, speak with an attorney about steps to set up legally a health reimbursement account with your business. It is an amazing tool to have business pay directly for your health expenses. I was hospitalized three times this past year with a $13,000 family deductible plan, the health reimbursement account saved me thousands in taxes from having business directly pay for medical bills versus my taxed income paying.
There are many ways to pay for health insurance, medical expenses, and health related preventative care like massage, spas, and chiropractic adjustments as a business expense versus personal expense. Spending a few hours with an attorney to create these health expense protocols in your business legally will save you thousands in the long run on taxes. Taxes are your most expensive business and life expense, learn the rules and use them to your advantage.
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