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is an independent adviser service offering free online support about any health reform issue. OnlineNavigator is not acting as agent for any qualified health insurance marketplace and is not affiliated with any federal or state programs. This service is available online 24/7 through email and social media sites usually with same day response. See the web site for details on privacy policy and terms of service.


Group insurance

Group insurance is the traditional form of coverage offered to employees of a business. While health reform may eventually change that structure, almost 40% of employers rely on group insurance to deliver life, health and accident insurance.

Group health insurance is very different than individual health insurance. There are both advantages and disadvantages of group insurance as compared to individual insurance. Legal restrictions are more complex. Group insurance is subject to laws of the Department of Labor, Department of Treasury and the U.S. Department of Health and Human services. The cost is higher primarily because the insurance company is required to accept all applicants and, under certain conditions, cannot impose limitations on pre-existing medical conditions.

The Small Business Health Care Tax Credit helps small businesses and tax-exempt organizations pay for health care coverage they offer their employees. A small employer is eligible for the credit if it has fewer than 25 employees who work full-time, or a combination of full-time and part-time. For example, two half-time employees equal one employee for purposes of the credit. For 2013, the average annual wages of employees must be less than $50,000, and the employer must pay a uniform percentage for all employees that is equal to at least 50% of the premium cost of the insurance coverage. The maximum credit is 35 percent of premiums paid for small business employers and 25 percent of premiums paid for small tax-exempt employers such as charities. The benefits are higher in 2014.

If you are a small business employer who did not owe tax during the year, you can carry the credit back or forward to other tax years. For small tax-exempt employers, the credit is refundable, so even if you have no taxable income, you may be eligible to receive the credit as a refund so long as it does not exceed your income tax withholding and Medicare tax liability.

Group life insurance is another simple and inexpensive employee benefit. The employer typically provides a minimal amount for each employee (or different amounts for different classes of employees) and the employee may elect to increase the coverage amount through salary-deducted contributions.

Freedom Benefits offers group insurance to small businesses as part of an employee benefit funding structure. For example, a Section 125 cafeteria benefit plan, Flexible Spending Account (FSA), or Health Reimbursement Arrangement (HRA) can be used as the structure that provide for tax-free employee benefits.  For more information on employee benefit plans for small businesses, see 

Every small business is unique and applicable law gives wide latitude to the design of employee benefits plans. Benefits should be designed to meet the specific goals of the employer. We invite you to call benefits adviser Tony Novak to let us know how we may help you improve your own group benefits.


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This web site is independently owned and managed by Tony Novak operating under the trademarks "Freedom Benefits", "OnlineAdviser" and "OnlineNavigator". Opinions expressed are the sole responsibility of the author and do not represent the opinion of any other person, company or entity mentioned. Tony Novak is not an agent, broker, producer or navigator for any federal or state health insurance exchange but may provide uncompensated advice, reviews and referrals to these resources. Novak is compensated as an accountant, adviser, affiliate consultant, marketer, reviewer, endorser, producer, lead generator or referrer to some of the other commercial companies listed on this site. Information is from sources believed to be reliable but cannot be guaranteed. Any tax advice in this communication including attachments and linked resources cannot be used by the taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer.