An increasing number of small business owners and entrepreneurs are choosing to run their companies through Limited Liability Companies (LLCs). Naturally, a common question that follows is whether LLC owners can get health insurance through their business or not. In short, the answer is yes! But of course it’s not that simple and there are a number of different options at hand. To help provide LLC owners with insight and protection, we’re discussing the various ways to obtain health insurance, potential tax advantages and the steps involved to get insured.
Understanding LLCs and Health Insurance
What is an LLC?
An LLC is a type of flexible corporate structure that lets its owners, or members, profit from the business while being protected from personal liability. What separates LLCs from most other structures is flexibility in management and taxation. For example, LLCs are taxed on a pass-through basis.This means that all profits and losses are reported on the member’s personal tax return. This flexibility makes LLCs a popular choice for entrepreneurs and small business owners alike.
LLC Owners and Health Insurance
When it comes to getting health insurance, LLC owners have a number of choices. Depending on the structure of the LLC, owners can:
- Purchase individual health insurance, or
- Take advantage of group health insurance policies designed for small businesses.
Eligibility and Benefits
At the end of the day, the option that is chosen usually comes down to the size of the LLC. For single-member LLCs, insurance options look similar to those available for self-employed individuals. Sole owners can purchase plans directly from an insurance provider or through the marketplace. Most individual plans offer preventative care coverage, specialized care options, prescription drug coverage and more.
If an LLC has more than one member, the company will generally be eligible to explore small group health insurance plans. Group health plans usually offer similar benefits to individual plans with lower premiums and broader coverage options. Additionally, offering group health insurance helps in recruiting and employee retention efforts.
Tax Benefits of Health Insurance for an LLC
Tax Deductions for Premiums
Health insurance premiums are tax deductible as a business expense for LLC owners. This deduction can be quite impactful in reducing the overall tax burden of most companies. The even better news is that this deduction applies whether an LLC has a group health plan or an individual plan.
Self-Employed Health Insurance Deductions
The owner of a single-member LLC who is considered self-employed, may be eligible for a special tax deduction for health insurance premiums. Simply put, this deduction lets self-employed owners deduct premiums directly from their gross income. Additionally, this deduction can also apply to premiums paid for spouses or children under 27 years of age. This benefit creates a great financial advantage for self-employed LLC owners.
Steps to Getting Health Insurance Through Your LLC
Assess Your Needs
Begin the process by factoring in the number of employees in the organization and any dependents requiring coverage. Then consider the level of coverage that is necessary for the workforce. For example, basic healthcare may be all that’s needed. Other options include comprehensive plans with access to specialists, or plans with supplemental benefits like dental and vision. Lastly, take into account the budget and what’s affordable for the company and its employees. By factoring all of these things together, it’ll be easy to narrow down your options and find a suitable plan.
Shop Around
Never settle for the first plan that you come across. Instead, take the time to compare a variety of plans from multiple providers. In addition to the premium costs, consider each plan’s deductibles, co-pays, coverage limits, and network. Additionally, it’s crucial to understand the specific benefits of each plan like telehealth services, wellness programs and prescription drug coverage. It also never hurts to consider the reputation of the carrier in terms of claims processing and customer service. Using a comparison shopping site like Group-Health-Quotes makes this process simple, allowing owners to view multiple options all in one place.
Consult a Professional
It’s also highly valuable to consult with an insurance expert specializing in small business health coverage. Insurance experts deal with individuals and businesses in need on a daily basis, so they have the expertise to make personalized recommendations based on your LLCs needs and budget. They can break down the fine print and insurance jargon so there won’t be surprises down the line. Above all these experts can assist with the enrollment process and act as a middle between the LLC and the insurance provider if any issues arise.
The Bottom Line
Getting health insurance through an LLC isn’t only possible, it’s smart and we recommend it for all LLC owners. By simply evaluating the needs of the company, considering a variety of plans, and consulting with an expert, it’s never been easier to locate a plan that is both affordable and comprehensive. No matter if it’s one person or fifteen, being covered offers piece of mind, and in this case, extensive tax benefits.
At Group-Health-Quotes.com we want to make the insurance shopping experience as seamless and fast as possible. That’s why we have an easy to use platform where businesses can obtain free quotes, and compare insurance offerings side-by-side. Additionally, we have insurance experts working around the clock to assist in any way during the process. So what are you waiting for? Just fill out a quick form on our homepage or give us a call at 888-571-0291 to get your quote and learn more.
