By John Niekraszewicz
I'd like to share with you a few stories of how your fellow AHIP business owners have used the AHIP Association Health & Dental Plan since 2010 to protect their employees and build a better business. The common thread in these stories is the desire to watch expenses while providing a healthy and hygienic workplace.
Mary always had a corporate paid comprehensive health and dental plan, so when she opened her own clinic, she offered a similar plan to employees and their families. Over time, she found that the premiums she paid kept on increasing to the point where she needed a more affordable solution.
The AHIP Association Health & Dental Plans have a cap on benefit limits and a premium that is based on a large pool of individuals which helps keep premiums low. Of the 4 plans, the Base Plan suited Mary's needs best as it has the lowest premium and can be offered to all employees regardless of any pre-existing health conditions. No contract, pay as you go, month by month.
Mary was able to deduct as a business expense the average annual premium of $1,000 she paid for each employee enrolled in the plan (some employees were covered under a spouses health plan and Mary gave them a cash bonus of $500 for opting out of her corporate health & dental plan). Here are the cash reimbursements that one employee who was recovering from an accident received from the Base Plan:
Carol and Heather are 40-year-old hearing instrument specialists who together are business partners with their own practice. They have always kept their personal finances separate from their business and paid for their family's health and dental expenses out of pocket with after tax dollars. Now their business is growing and they are looking at ways to protect their business and save tax. By reorganizing their financial expenses for health & dental, critical illness, disability and life insurance, Carol and Heather found that they were able to deduct the premiums paid for an AHIP Association Health & Dental Plan as a business expense. Then they put the realized tax savings back to work and upgraded their entire insurance protection program.
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Carol and Heather lead healthy lifestyles and the medical expenses they incur are mainly for teeth cleanings 3 times each year and regular visits to both a naturopath and a registered massage therapist on their spa holidays. Being in a 40% marginal tax bracket meant they each had to take out $3,000 in salary before tax so that they would end up with $1,800 after tax to pay for these medical expenses.
With the AHIP Association Health & Dental Plan any upgrade from the Base Plan requires completing a medical questionnaire (this applies to the Bronze, Silver and Gold plans). Carol and Heather have no pre-existing medical conditions and realized that their needs were best covered by the more comprehensive Silver Plan. Eventually they covered their entire families under the Silver Plan and had their company pay the tax deductable premiums.
In Carol's case, the company paid the annual premium of $1,450 and she personally received tax-free cash reimbursements for the following:
Heather experienced similar expenses as Carol, but in addition she had unexpectedly been prescribed some expensive medications and her AHIP Association Health & Dental Silver Plan paid up to $5,000 each year for these drugs.
You may recognize those mentioned in these stories even with their names changed to protect privacy, but if you talk to fellow members you will hear of many other reasons why the AHIP Association Health & Dental Plan is a smart benefit for your company.
Before implementing any tax, investment, life insurance, or estate planning solutions it is best to seek professional advice. Have an experienced team of professionals work together to uncover the weak links in your plans and implement the correct solutions. Don't just leave your plans to chance because without structuring your family's wealth and estate plans properly, often, bad outcomes occur.
Secure the dog house and invest wisely, then you can enjoy life & have fun.
About the Author
John Niekraszewicz (Nick-ra-shev-itch) BMath, FCSI, CFP, FMA is the Certified Financial Planner responsible for the AHIP Association Health & Dental Plan provided by JVK Life & Wealth Insurance Group. John is also the Principal of JVK Life & Wealth Advisory Group, specializing in Wealth & Estate Planning. John welcomes your questions and can be reached at 1-800-767-5933 or firstname.lastname@example.org
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