I walk into many privately-owned companies only to find out the business owners are set up under the same benefit plan as their employees. Should benefit plans for business owners differ from employee plans? In a word, Absolutely!
It’s all too common that I see business owners having the same co-pay obligations as their employees. So if an owner goes to a dentist and has to pay a 20% co-pay, how does this make sense? Why is the owner paying a portion of legitimate health and dental claim with after-tax dollars? One of the perks of owning your own business should be the right to claim legitimate business expenses. Writing off CRA-approved health expenses through your business is one of the last bastions for owners to take advantage of. This can represent thousands of dollars in legitimate tax savings.
The best way of managing these expenses can come in the form of supplementing a standard plan with a Health Savings Account (HSA). The benefits of using this vehicle versus using an enhanced insured plan are:
- Fees are considerably less.
- You don’t pay for the HSA if you don’t use it.
- Items like orthodontics, vision care and co-pays can be put through an HSA.
- You can still coordinate benefits with a spouse who may be on another company plan without incurring any additional cost to your own plan.
- Other features of HSA’s
Many business owners take a considerable risk at a considerable cost in running their businesses and are eligible to write off these expenses. If you’re a business owner that is still paying for health expenses in after-tax dollars, may want to enquire through their benefits provider and see if there’s a better way.
Chris Coulter is the Founder and President of The Finish Line Group. He works with business owners to leverage their businesses to increase their wealth, reduce corporate and personal taxes, create viable succession strategies, enable employee retention strategies and allow them to exit their businesses on their terms.
Chris’ passion for what he does evolve from the mistakes he made in his first business; by not diversifying his risk and not utilizing a lot of the opportunities within his business to create significant wealth. Chris found out the difficult way and now educates business owners on how to avoid many of his former oversights and ultimately control where their finish line ends.
Benefit plans for Business Owners