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What is Group Health Insurance?
Health insurance provided to members of a group of persons, as employees of one or more employers or members of associations or labor unions. The term is usually used to distinguish this type of health insurance from individual health insurance. One master contract is written to cover the group.
Small Business Health Insurance
If you own or belong to a business or organization with less than 50 people small business health insurance has lots of benefits for you. Besides providing medical care for yourself and your employees, a small business health insurance plan helps spread the financial risk between all the members, which usually means lower premiums and more extensive coverage for everyone. But group health insurance has tax advantages too. Employer contributions to a small business health insurance plan are generally 100% tax deductible, and employees save on payroll taxes. Small businesses (and certain organizations, like non-profits) are generally eligible for group health insurance so long as they can show two or more full-time taxable employees.
Key questions for evaluating a health plan:
- Are there deductibles to be paid before the insurance begins to help cover costs?
- What doctors, hospitals, and other medical providers are part of the plan?
- Is there enough providers available in your area?
- Can doctors outside a plan's network be used, if so, what are the costs?
- Are there any limits to how much is paid in case of major illness?
401(k) Plan
A 401(k) plan is named after a section of the tax code and is a qualified plan established by employers to which eligible employees may make salary deferral (salary reduction) contributions on a post and/or pre-tax basis. Employers may make matching or non-elective contributions to the plan on behalf of eligible employees and may also add a profit sharing feature to the plan. Earnings accrue on a tax-deferred basis. A 401(k) plan allows you to contribute up to a certain percentage of your before-tax pay, which varies based on your employer's plan. The IRS establishes the maximum dollar amount that an employee can contribute from before-tax pay.
Savings Incentive Match Plan - SIMPLE IRA
A SIMPLE IRA plan is an IRA-based plan that gives small employers a simplified method to make contributions toward their employees’ retirement and their own retirement. Under a SIMPLE IRA plan, employees may choose to make salary reduction contributions and the employer makes matching or nonelective contributions. All contributions are made directly to an Individual Retirement Account or Individual Retirement Annuity (IRA) set up for each employee (a SIMPLE IRA). SIMPLE IRA plans are maintained on a calendar basis.
Simplified Employee Pension - SEP IRA
A type of retirement plan that an employer can establish, including self-employed individuals. The employer is allowed a tax deduction for contributions made to the SEP Plan. The employer makes contributions to each eligible employee's SEP IRA on a discretionary basis.
Traditional IRA An IRA that is not a Roth IRA or a SIMPLE IRA. Individual taxpayers are allowed to contribute 100% of compensation (Self-employment income for Sole proprietors and partners) up to a specified maximum dollar amount to their Traditional IRA. Contributions to the Traditional IRA may be tax-deductible depending on the taxpayer's income, tax-filing status, and coverage by an employer-sponsored retirement plan.
Roth IRA
An individual retirement plan that bears many similarities to the Traditional IRA. Contributions are never deductible, and qualified distributions are tax-free. A qualified distribution is one that is taken at least five years after the taxpayer established his/her first Roth IRA and when he/she is age 59½, disabled, or using the withdrawal to purchase a first home (limit $10,000), or deceased (in which case the beneficiary collects). |
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