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Discussion Forum Index --> Tax Questions --> Health insurance paid by C-Corp
TaxPerson (talk|edits) said:
| 7 December 2006
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| Client is a 100% shareholder and officer of the C-Corp and he takes a salary. The company does not offer health insurance benefits to employees. He wants the company to reimburse him alone for his own health insurance premium. Is it even doeable? If yes, can the company pay the premium directly to his health insurance company for him? Or does it need to have a medical reimbursement plan? I don't do enough C-corps and am really confused. Any input is appreciated. Thanks.
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WesR (talk|edits) said:
| 7 December 2006
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| Hi I would pay his the premiums directly to the insurance co. you can discriminate for health premiums. But dont waste your time and effort for an MRP becasue that wont work unless you avoid the discrimination tests. bye
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Natalie (talk|edits) said:
| December 8, 2006
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| With all the rules out there about employee benefits, top-heavy plans, etc., it seems like there would be some kind of consequence for having the company only pay for the owner's health insurance. Are you aware of any?
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Jdugancpa (talk|edits) said:
| 9 December 2006
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| My recollection is that Wes is correct. A fully-insured medical plan (wherein 100% of risk of loss is shifted to a third party, i.e. insurance company) may be discriminatory. An insured plan (wherein less than 100% of risk is shifted to third party) may not be discriminatory (i.e. a medical reimbursement plan).
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Natalie (talk|edits) said:
| December 9, 2006
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| So the company can deduct 100% of the premiums, there's no rule about including the amount as compensation or anything like that?
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Jdugancpa (talk|edits) said:
| 9 December 2006
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| Yes, deductible to employer, not taxable to employee.
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AJS (talk|edits) said:
| 11 December 2006
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| Since it's a C corp insurance premiums can be deducted in full and if the employee has already paid he can be reimbursed.
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