Some small businesses and startups consider extrapolation employee salaries or wages to help with their individual health insurance. For example, could offer a company a taxable salary increase, salaries, or salary bonus with the hope that use the employees to health insurance. Why? 
Typically, a business considers this approach because they want to provide health benefits for employees, but they can not afford group health insurance, can not group health Minimum Holding meet requirements and / or do not know they can formal, tax-deferred premium refund program.
on the surface, so that increases to employees for health insurance seems cheaper and easier than the reimbursement of insurance premiums by up formal premium refund program.
But there is a big problem, companies run into when they extrapolate an employee's salary for health insurance .: , it is very hard to take back the increase
Example problem
it is very difficult for a company to raise wages for health insurance to informal, and they take it away then.
For example, a start-up technology company decides taxable wages, with the intention to increase for their employees, a use that the employees in health insurance. The wage increase is folded in the gross income of the employee.
A few months go by, and the start hires two more employees. At this time, decides the start a formal health benefits program to start employee tax free refund for individual health insurance.
For an employee who received a salary increase for health insurance, it will be very difficult, if to take for starting the increase for health insurance back -. although it with a formal, tax-free health benefits
Many companies in this situation, we say replace "I wish I would only have begun the formal tax-free premium refund program."
Other problems with an employee's salary for health insurance Up Grossing
There are confronted three additional problems small businesses and start-ups, when giving taxable salary increases for health insurance lands more for taxable wage increases
companies often think that a taxable wage increase will be cheaper to pay.
business. But the business is spending more on the salary rises than it for tax-deferred premium refunds. See the breakdown of tax savings in this article.
There is no guarantee employees spend the money on health insurance
By increasing the taxable wage for workers health insurance, there's no guarantee that the employee the money for spend health insurance. With a formal premium reimbursement program, employees are required to furnish proof of health insurance coverage to show. Any unused dollars remain with the business.
For example, if the company provides $ 250 / month, and the health insurance premium the employee is $ 0 / month, the company reimbursed the employee $ 0 / month.
companies lose top candidates for competitors with formal health benefits
While saying candidates may sound nice "we offer higher wages, so that your can buy their own health insurance, "most candidates want for one employer, which provides a formal, tax advantaged health benefits program (as compared to a causal, undocumented arrangement).
what problems you or your customers from high bills salaries of employees encountered for health insurance?
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