Self Employed & Health Insurance (Health Insurance Reimbursements)

Self Employed & Health Insurance (Health Insurance Reimbursements)


(crescendo music) – [Toby] My question pertains to health insurance reimbursement. I have a C corp and an S
corp so right off the bat we already know that we’re dealing with the difference between S corp and C corp when it comes to reimbursing. I pay myself a modest
income, more than likely out of the S corp. I qualify for a subsidy of $125 per month and I’m assuming that’s
on the marketplace. – [Jeff] That’s what I was thinking. – [Toby] Yeah, so leaving me to pay $386 for my health insurance. You may want to look at some
of the faith-based plans. They’re even less than that. Can I reimburse myself my, from my C corp out-of-pocket premium? I pay Blue Cross Blue Shield
and able to write it off in the C corp? So the answer is it depends. First off, you can’t have any employees in any of these companies
other than yourself and a partner. So if it’s you and it’s just you, nobody else, then the answer is yes. If it’s you and a spouse,
the answer is yes. If it’s you and a
partner, the answer’s yes because technically you
don’t have to comply with the ACA. If you go above that then
you’re in ACA territory and you’re going to have
to provide minimum coverage although the Department
of Labor and the IRS don’t agree on this and
there’s a bunch of stuff going back and forth and
they have this weird, you know the term for it,
less than 50 employees. What do they call that? – [Jeff] Oh, they call it
the small business exception. – [Toby] It’s some goofy
thing where they actually I thought it had like qwerty,
I always think of qwerty ’cause of the keyboard but it’s some weird qualified this, that or the other. What the, the point is
is that it’s really tough to get coverage if you
have less than 10 employees and you can’t and you’re supposed to
be getting that coverage to qualify for ACA so if it’s just you, you don’t have to worry about that ’cause you’re exempt and then you could you can write off out of your C corp, it can reimburse you anything that comes out of your pocket for premiums, copays, deductibles, non-covered, whatever. If its, if its, it has to do with health and the fixing your body
or keeping your body healthy, then chances are
it’s going to be deductible. I mean especially if
a doctor prescribes it or if you’re under the care
of a medical professional. That’s really the only way
I know of you can write off club membership dues,
if they prescribe it. – [Jeff] Yeah, the only
issue about writing off the out-of-pocket expense is we really don’t know what
your credits going to be until we complete your 1040. So while you’re getting
that $125 a month subsidy what your credit actually
is, could be more, it could be less than that. – [Toby] Yeah. – [Jeff] Depending on your total income. – [Toby] But we can keep your total income pretty darn low if we’re
reimbursing through a C corp. So you’re actually doing it right. C corp probably manages the S corp. Have a management agreement,
make sure it’s in writing, make sure you’re invoicing and oh yeah, you could do some pretty
amazing things here ’cause if, if. There’s not just the 386 but it’s anything that comes out of your pocket including the deductibles and copays. – [Jeff] Right. – [Toby] If it’s dental,
shoot, they only cover about half of a procedure so you could do some pretty amazing things with this one. So the answer is it
depends on your situation. Hopefully it’s just you, you and a spouse and then you can do whatever you want. If it’s not, then we
just have to be cognizant of the fact that we have
to comply with the ACA which case the answer is still yes but you may have to offer that
benefit to other employees. Employees that you’d have
to offer the benefit to are 30 hours or greater. – [Jeff] Right. (rhythmic music)

Author: Kevin Mason

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