Kelly J. Bullis: Small business health insurance not loosey-goosey

Them times, they are a changin’! Even when it comes to providing healthcare insurance to employees for small business owners.

Let’s get something straight first. If you have 50 full-time employees, then you must provide healthcare insurance to all your employees or face prohibitively high penalties. Hopefully, you have already learned how and what to do and are in the process of doing that. This column is not aimed at you.

Today’s “audience” are the “85 percenters” who have small businesses and are under the 50 employee limit.

One of the most popular methods of providing healthcare insurance for this group was to just “reimburse” (pre-tax) the employees for getting their own personal insurance. The IRS even blessed this “informal health insurance arrangement.”

Under Obamacare, this is no longer an option. In fact, the penalties for continuing to use this simple and effective method could be enough to put you out of business!

Your only option now is to either: One — Go ahead and find a group healthcare insurance policy for all your employees and work out an arrangement with them on how much they help in sharing the cost. Or two — Raise their wages enough to give them the ability to go out and purchase their own health insurance.

Let me talk about option two a bit. Did you notice that this arrangement means that the money used to purchase healthcare insurance is now “after tax?” (If you provide the insurance through your company, the portion you pay is not subject to reporting as taxable income for your employees.) This was by deliberate design. Congress’ intent was to make the option two too expensive and prod you into voluntarily providing healthcare insurance through your company.

If you are like me, having a religious objection to having to provide healthcare insurance that includes abortion drugs, then you can only choose option two or do nothing at all.

So, what has Congress accomplished? It eliminated one of the simplest and most effective ways for small business employers to provide healthcare insurance for their employees.

Did you hear? “Anxiety in a man’s heart weighs it down, but a good word makes it glad.” — Proverbs 12:25.

Kelly Bullis is a Certified Public Accountant in Carson City. Contact him at 882-4459. He’s on the web at and on Facebook.


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