An Employee Benefits FAQ with Joshua A. Diveley.
One of the big benefits to offering group health insurance is tax benefits. For example in 2014, there is a small business tax credit that allows small businesses that pay a portion of their employees’ health care premiums to take up to a 50% credit. In addition, the premiums can be paid on a pre-tax basis rather than after tax, which is helpful for employees because if you pay after tax the only tax benefit you can get is by taking an itemized deduction on your personal return and that is subject to a 10% floor so a lot of people don’t hit that because of their income levels so the pre-tax premium payments can be a significant benefit.
Another benefit is that employees may be able to get a preferred group rate as compared to everyone going out and buying individual policies and having their personal demographics determine their rate.
And lastly, with health care costs going up significantly each year, the health care insurance and benefits you provide can be a significant recruitment and retention tool for your employees.
© 2014 Parsonage Vandenack Williams LLC
For more information, Contact Us