How important is the employer-paid individual health insurance costs?

How important is the employer-paid individual health insurance costs? -

If you are a small business who is tired to overpay for health insurance, you are not alone. In the next three years 60 percent of small businesses are expected to announce group health insurance in favor of the employer-sponsored individual health insurance. The main reason? Costs.

What is employer-paid individual health insurance?

With employer-sponsored individual health insurance, a small business employees for their own individual policies reimbursed acquired regardless of employment. offered Reimbursement Program instead of providing a one-size-fits-all insurance group . This gives the opportunity to the employees to bring their own plan instead of an expensive policy they pay do not choose.

This approach is referred to as premium refund or "pure" defined contribution healthcare.

How much does employer-paid individual health insurance?

The simple answer is: employer-sponsored individual health insurance costs as much as small business would like to contribute. It is 100% up to the employer.

Unlike traditional group health insurance, there is no minimum contribution requirements. The company uses monthly allowance is, and they can make money is vary by class of employee.

For example, when a 10-person company decides each month $ 250 / month, contribute the maximum total cost would be 10 x $ 250 or $ 2,500.

, the In this example, $ 2,500 maximum monthly amount, although use not always 100%. If the insurance premium of the employee is only $ 150 / month, then the employer paid 150 $ / month.

That being said, some small businesses prefer a more detailed cost analysis considering doing the how much employees pay for their own health, and to compare these insurance group

followed by a more detailed analysis do these five steps :.

• Step 1: Employees Demographic information gathering

• Step 2: Use employee demographics Individual Health Insurance collect estimated for each employee costs ( remember, in their premium tax credit discount factor If Eligible) [1945009[

• step 3: Collect group health insurance costs for each employee

• step 4: estimated tax penalties for the business, if applicable (Note: This for companies with 50+ employees)

• step 5 applies only: analyzing the results

Tip: download to easily perform these free worksheets a cost analysis of employer-sponsored individual health insurance.

Tweet