Sub-S employees that own more than 2% of the company already pay Federal and State taxes on health insurance coverage. However, if you own 2% of a company you usually can afford it. I would prefer to pay for my own health insurance because I would get only a major medical policy with a high deductible in conjunction with a Health Savings Account. It would be cheaper.
Dear flynmudd,
"Sub-S employees that own more than 2% of the company already pay Federal and State taxes on health insurance coverage."
That was once true, but I don't think it is anymore.
During the late 1990s and early 2000s, deductibility of health insurance premiums for folks who own their own businesses was phased in. I remember when I didn't receive any deduction for my premiums, but I remember that over the years, I received increasingly higher percentages of deductibility, until now, it's either 80% or 100% (I don't remember off the top of my head).
However, we just started a plan with an HSA component, and as the owner, I don't get the deduction for contributions to my own Health Savings Account (although, of course, my business gets a deduction for contributions to my workers' accounts).
sitetest