What’s better to cover my employees on a Group Plan and get the Section 106 deduction and possible tax credits if average wages are under $50k
or just have each employee get coverage on their own?
Individual Plans vs Group Plans for Groups is IMHO pretty much a dead issue under Health Care Reform. Near as we can tell it’s not allowed.
For lower income industries and less than 50 employees – no employer mandate, there is the possibility to not have a plan and let employees get Covered CA subsidies.
See our other pages on this topic:
Individual Plan Reimbursement? Cash in Lieu of Benefits
We have this page still here as we don’t like to destroy what took hours to build when we were originally asked this question. Who knows, it might be relevant in the future, considering that ACA has been declared unconstitutional – Texas v USA or what political change may come about. I thought COBRA would not be relevant with guaranteed issue no pre x individual plans!
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Reasons to have employees get coverage on their own
Free Individual & Family Quotes
Lower Business Expenses – No Group Health Premiums
No need to budget for premium increases, either medical inflation or Health Reform Taxes and increased minimum essential benefits.
Less work for the HR Department. Employees get coverage on their own, you don’t have to get involved.
Affordability Issue 9.5% of employee coverage, not dependents.
Guaranteed Issue – No Pre X
Mandate to have coverage on their own or thru Employer or pay Tax, which is Zero right now of income…
Premiums deductible if over 7 or 10% of Income
Tax Credit (subsidy) for individuals making between 100 and 400% of Federal Poverty Level
Part D Rx & B Doctor Visits
Surcharge Chart
We don't always have time to update this chart.
Just click on chart or Medicare Costs Publication #11579 for the latest from Medicare.
Part D
Higher Income Surcharge
Part B Doctor Visits
Higher Income Surcharge
Misc. Resources & Information
Congressional Budget Office Report Page 19 – 22
Health Savings Accounts (HSA) where one can get a policy with a high deductible, and lower premium. Then fund a special account like an IRA that is tax advantaged to pay expenses not covered by Insurance
Same Figure out the taxes?Turbo Tax Turbo Tax – Personal
Free Quotes for ALL Companies we write with, just like an Exchange NOW.
Same
Department of Insurance Guide health insurance info.net (written prior to Health Care Reform)
Quality Dividend CalculatorTM 2011, gives you a simple way to estimate how your choice of health plan will affect the productivity and absenteeism of your workforce.
When employees get higher quality care, they stay healthier, absenteeism drops, and productivity improves
Fewer Days Lost with Better Medical Coverage 
12.2012 only 3% of EmployER’s will drop coverage
Myth – Employers will stop covering employees
benefit credits.com Study shows paying fine saves $$$ politico.com/
Advantages – To get or keep your group plan FREE Quotes
Health Coverage is the 2nd most important benefit to the employees and families, only after their paycheck.
Powerful tool for recruiting and retaining the best employees…. not the ones who want Medi Cal or heavy subsidies.
If your employees are on Medi-Cal, they might have to take the entire day off for Medical Services – Presenteeism
Section 106 Tax Deduction for Employer and NO INCOME to Employee. Employee portion can be tax deductible with Section 125.
Better Pricing (Compare Individual – Group) and Provider Networks.
Use SHOP program to NOT coverage dependents, thus one can cover employees only and not affect subsidies for families under 600% Federal Poverty Level.
Insure Me Kevin.com Explanation 9.29.2015 .
Currently GUARANTEED issue and generally NO Pre X, under AB 1672 enacted in 1992 and AB 1083 effective 1.1.2014
Covered CA Brochure on Advantages of EmployER Plans
No mandate for Employers under 50 employees
Premiums are FULLY Income tax deductible for EmployER and not considered income to employee.
Section §106 is the biggest break there is in the Tax Code, even more than Mortgage Interest.
Section 125 – Premiums paid by Employee are a full deduction, including Social Security & FICA
Additional Tax Credits for employees making less than $50k
No more Management Carve Outs?
Other Taxes:Except Grandfathered Plans
Saves Social Security Tax 6.2% from Employer
4.2% from Employee
FICA Unemployment Insurance UI Rate can go up to $434/year
Worker’s Compensation Discount
Check out related pages in Employer Mandate Section
Better Provider Networks in Group Plans?
Subsidy Chart for Individuals
Mandatory (Should) notice to give employees about Health Care Reform
Employer Tax Credit Management Carve Outs where you only cover owners & managers, OK for dental, Long Term Care, but no longer allowed under §2716
More on offering Individual Plans in lieu of a group plan