I run a business as the only employee. Best way to do health insurance?

October 23, 2019 9:54 AM

Open Enrollment is upon us and I have a family and we need some health insurance! We've been cruising on Cobra from my last full time gig, but now I have a strong business up and running and have set myself up with regular paychecks and other benefits — what about healthcare? Is it easier to just buy myself as an individual on the exchanges, or can I get a better deal as a business owner?

So I'm already set up as an LLC and receive regular steady paychecks from my company. Is buying health insurance as a small business owner for 1 employee substantially better than deals I can get on the Exchanges? Family of four, based in California if that helps.

posted by amoeba to Work & Money (5 answers total)

Insurance bought as a business can get a better rate because it's a group, but you are not describing a group. So it probably won't save you any money. I dont know about cost, but looking beyond the exchanges may give you more options about networks, out of network coverage, etc which could possibly be important for you.
posted by SemiSalt at 10:06 AM on October 23, 2019

Best answer: Do you have a trade association? Our small company (35 employees) has had insurance through our trade association that lumped us in a group with other related small companies. You might also talk to an insurance broker who would know about other options available.
posted by sarajane at 10:56 AM on October 23, 2019 [1 favorite]

If you're the sole employee of your company, then you won't likely be able to shop for small business rates and you won't be eligible for the small business tax credits (for more info, see healthcare.gov's info about small business insurance). The trade association tip is a good one; you might also check out your local Chamber of Commerce to see if they offer insurance plans to sole proprietors/employees. Definitely compare their rates against what's available in the marketplace.

One other thing worth checking: see if it's possible to put just yourself (and your partner/spouse, if applicable) on the marketplace plan, and enroll your kids in CHIP (income eligibility info). It'll depend on your particular situation, your state regulations, and your insurance options -- but if this is a possibility for you, it could save you a ton of money.
posted by ourobouros at 2:10 PM on October 23, 2019

If your household income is less than 400% of the federal poverty level for a family of your size, then you can receive a subsidy only if you buy insurance on the ACA exchange.

Also, your health insurance premiums are deductible since you are self-employed. You say you have an LLC, but that doesn't really mean anything. What is more important is whether you are operating as a sole proprietorship or as an S-corp. Since you say you are collecting paychecks, it would suggest S-corp. The way you claim the insurance deduction may be different in the two cases so you may want to consultant an accountant.
posted by JackFlash at 5:13 PM on October 23, 2019

Response by poster: Just a note: we won't qualify for any income-based assistance. And I am an S-Corp. Thanks!
posted by amoeba at 10:25 AM on October 24, 2019