Heath insurance for business what it costs

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Health Insurance for Business

What does it really cost?

Health insurance is not cheap, but it is less expensive than you think. Health insurance premiums paid by a business for employees are 100% tax deductible as a business expense. This means that the net cost after taxes is a lot less than the cost before taxes.

The chart below gives 2 examples of how the tax advantages of employer paid health insurance can reduce the net cost of insurance premiums for sole proprietors or corporations.

Estimate of Net Cost of Health Insurance premiums after taxes (Example only - actual costs will vary)	Sole Proprietor with 5 employees	Corporation with 5 Employees
Average premium cost per year for standard HMO for employee age 30-39 (cost varies by plan type and age)	$2040	$2040
# of employees that employer will cover	5	5
% of premium paid by employer (can vary from 50% - 100%)	50%	50%
Total annual premium expense to employer [Average cost x # of employees x employer % share]	$5,100	$5,100
Tax Deduction as business expense(Total annual premium excluding owner)	$5,100	$5,100
Average tax rate (State and federal combined)	37%	24%
Total tax savings [Business expense deduction x average tax rate]	$1,887	$1,224
Net cost of health premiums to employer [Total premium cost - Tax savings]	$3,213	$3,876

AND REMEMBER:

Health benefits attract good employees, which improves the productivity
of your business.

Health benefits can improve employee retention, which means less money
spent training new employees.

Employers report that employees with insurance have lower absenteeism
rates, which also improves overall productivity.

more health issues

The San Diego Business Healthcare Connection

www.sdbhc.org/pages/private.php

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Health Insurance for Business

The information and opinions expressed on this web site are not intended to be a comprehensive study, nor provide legal advice, and should not be treated as a substitute for specific advice concerning individual situations. Arch1design is not responsible for the content of external internet sites which link to this site or which are linked from it.

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