Building A Health Plan For Your Home Contracting Business Doesn’t Need To Be Hard
Arizona home trade contractors may know how to build, fix, rehab, and improve every aspect of a house, but they may not know how contractors get health insurance.
Fortunately, small contracting business owners and independent home trade contractors don’t need to spend hours off-site and on their computers to figure out how to cover their own healthcare needs and those of their hard-working employees. At Anderson Insurance Services, our local independent insurance brokers help Arizona small businesses and contractors get health insurance coverage that best fits their needs and budget. If health insurance for your small contracting business is on your punch list, we can help you get the job done.
The Basics Of Health Insurance For Arizona Contractors
Health insurance carriers in Arizona offer multiple plan options specifically designed for the needs and budgets of smaller businesses. Here’s how the process of getting group coverage for your employees works.
Your contracting business, working with a knowledgeable health insurance broker, selects the plan that works best for you and then purchases health insurance for the “group,” which consists of you, your employees, and dependents. Your company may decide only to cover full-time employees, or, as more businesses are doing, you can provide coverage to any part-time employees as well.
A home trade contracting business that offers its employees a group health insurance plan usually pays the health insurance company the full fee for the coverage. But the business gets help paying for those fees by deducting contributions from the wages or salaries of any employees who enroll in the group program. Since your company takes these deductions for premium costs before calculating state and federal tax obligations, you reduce the amount of your employees’ taxable income. This has the effect of increasing the amount of take-home pay in each paycheck. And quality health insurance + more money in employee pockets = happy employees.
Can Home Trade Contractors Get Health Insurance If They Only Have One Employee or Work For Themselves?
Many contractors who run their own businesses think that their company is too small or doesn’t have enough people on the payroll to qualify as a “group” for purposes of health insurance coverage. But your contracting company will likely be able to obtain group coverage even if it has only one full-time employee. However, to be eligible for a group plan, that one employee must work at least 30 hours per week and not be an independent contractor. The employee also cannot be your spouse or another relative, nor can they be a part-owner or business partner of your contracting business.
If you are a self-employed home trade contractor and have no employees (even if you occasionally engage other workers as independent contractors), you probably won't be able to enroll in a group insurance plan. However, Anderson Insurance Services offers a wide range of individual and family health insurance coverage options that can provide affordable coverage for yourself and your family.
Won’t Group Health Insurance Cost Too Much For My Small Contracting Company?
If your contracting business has fewer than 50 full-time employees, you have no legal obligation to offer them health insurance coverage. You may see that as a huge relief, thinking that it saves you from spending money you can’t afford. But this overlooks the fact that home trade contracting companies can benefit from significant tax savings for providing coverage. These savings can reduce costs and make it that much easier and affordable for your company to provide your workforce with quality health insurance coverage.
All health insurance-related expenses that your company pays are 100 percent tax-deductible. Additionally, the Affordable Care Act (ACA) may provide your small contracting company with healthcare tax credits of up to 50 percent of its premium expenses during any two-year period.
Under IRS rules, your contracting business can generally claim the small business health care tax credit if it:
- Has fewer than 25 full-time equivalent employees;
- Pays average wages of less than $50,000 a year per full-time equivalent employee (indexed every year for inflation);
- Offers a qualified health plan to employees through a Small Business Health Options Program Marketplace (or qualifies for a limited exception to this requirement);
- Covers at least 50 percent of the cost of employee-only health care coverage for each employee.
Arizona also provides state tax credits to small businesses that decide to offer health coverage to their employees if they did not do so previously. The Arizona Health Insurance Premium Tax Credit is actually a tax credit received by a health insurance company that enrolls a new, qualified small business in a group plan. But the enrolling insurer passes that credit on to the insured small business in the form of reduced premiums, making it feasible for contractors to get health insurance.
As with anything tax-related, you should consult with both an experienced group health insurance broker and tax professional to understand how your health insurance program impacts your contracting company’s tax obligations.
Anderson Insurance Services: Over 30 Years Of Helping Arizona Businesses and Workers Get The Health Coverage They Need
As you see, it is not hard for a home trade contractor to get health insurance. Discuss your options today with Anderson Insurance Services, an experienced Arizona small business and individual health insurance broker. We have over 30 years of experience servicing the health insurance needs of companies and individuals in Scottsdale and throughout Arizona. We are committed to answering your questions, addressing your concerns, and providing solutions that can keep you and your workforce safe and healthy during these challenging times.
To obtain a quote and arrange a free consultation to discuss your small business health insurance needs, contact Anderson Insurance Services today.