Financial Wellness: The Surprising Tax Benefits of Supplemental Healthcare
Supplemental healthcare provides coverage that goes beyond the limits of an existing health insurance policy. Supplemental insurance can provide additional benefits or assist in paying for deductibles and out-of-pocket costs.
But did you know that supplemental healthcare can also offer tax benefits for employers who offer these plans? Here are some of the surprising advantages of supplemental insurance for employers.
Supplemental Healthcare: Tax Benefits for Employers
Providing supplemental healthcare to your employees can result in a higher level of employee engagement and can even reduce your employee turnover rate. But that’s just the beginning. Employers who offer supplemental healthcare can experience several surprising tax benefits as well.
Business Tax Deductions
Business owners are permitted to deduct most of their health insurance expenses from their federal business taxes. This includes the costs you pay for your employees’ regular insurance coverage, as well as any supplemental policies you might also include.
Small Business Health Care Tax Credit
If you’re a small business owner, you may qualify for the small business health care tax credit. If you’re already taking advantage of the Small Business Health Options Program (SHOP), then this credit can cover up to 50% of your insurance premiums. This applies to small businesses with fewer than 25 full-time employees.
Payroll Tax Exemptions
Supplemental healthcare coverage can reduce the amount your company owes in federal income and payroll taxes. Any money you contribute to employee health insurance plans can reduce your liability for such taxes as FICA or FUTA.
This will allow you to provide your workers with additional health coverage without a major increase to your operating expenses.
Employees Can Fund Insurance With Pre-Tax Dollars
Employees can also fund supplemental insurance policies with pre-tax dollars. This means that any money they contribute to a supplemental plan or an HSA will reduce their total tax liability.
This benefit doesn’t impact employers directly, but it may mean that you can share the cost of a supplemental plan since employees receive a tax benefit from paying a portion of their premiums or making HSA contributions.
Additional Benefits for Employers
Additionally, offering supplemental insurance may allow you to save money by purchasing health insurance with a higher deductible and relying on supplemental coverage to handle these out-of-pocket costs. This can save money all around and make it easier to provide benefits to your workforce.
Small business owners may consider pairing supplemental healthcare with other business solutions — such as Simpay’s dual pricing program, Select Plus — which alleviates the costs of credit card processing.
But a supplemental healthcare plan can bring more than financial benefits to your company. Employers will also discover that offering such plans creates a workplace culture where employees feel valued. And many supplemental insurance providers will work hard to offer customized solutions and wellness checks for personalized care.
Choose the Right Provider
With the right provider, both you and your employees can reap the benefits of supplemental healthcare.
Some providers can make it easy to save money and reduce your tax burden without compromising your healthcare. Live Life Healthy Healthcare offers a variety of cost-effective benefits, such as telemedicine, prescription drugs, wellness screenings, and other services.
Your employees are your most valuable asset. With a supplemental insurance plan, you can give them the coverage they deserve.
