I started an S-Corp about a year ago with one business partner. We’re at a 60/40 split and both take equal reasonable salaries.
The whole business almost failed right from the start because of a disagreement about health insurance. I wanted to go to the marketplace to insure my family, but my business partner was insistent on adding an employer plan. Her spouse is older with higher medical needs, so she said it was the only way she could make things work.
We’re now paying $3,800/month each to insure our families. (It is her [45F] + her spouse [64F] on one side and then on my side it is me [29F], husband [33M] + toddler [1M].) From basic research, I can find a comparable marketplace plan for about $1,500/month.
We pay 80 percent of premiums through the company, but that is counted as wages on our W-2. The tax benefits to the S-Corp may balance out, but that’s not really why I’m here.
Things went sour this week with our partnership. I discovered an email that my business partner sent to a potential client complaining about me and my personal financial situation (I used my own accountant for taxes rather than the business’s CPA + I cashed out my retirement to pay off my mortgage to take advantage of the COVID-19 allowance). It became very clear that my business partner does not respect me or my husband.
I’d like to sell/redeem my share in the business and continue as a sole proprietor or single-member LLC. How will that work with our employer plan? It looks like open enrollment runs through May 15. Is this my window? Should I be looking for clauses in my plan somewhere about dropping coverage? My business partner is the plan administrator, so I unfortunately do not have access to much more than is on my portal right now.
If I leave the business or at least drop the health care option, my business partner will no longer be eligible for the employer plan (it requires at least 2 W2 employees). I’m struggling with that, but I think I need to acknowledge that it is not my responsibility to insure my business partner’s family.
submitted by /u/stupidmillenial1
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I started an S-Corp about a year ago with one business partner. We’re at a 60/40 split and both take equal reasonable salaries. The whole business almost failed right from the start because of a disagreement about health insurance. I wanted to go to the marketplace to insure my family, but my business partner was insistent on adding an employer plan. Her spouse is older with higher medical needs, so she said it was the only way she could make things work. We’re now paying $3,800/month each to insure our families. (It is her [45F] + her spouse [64F] on one side and then on my side it is me [29F], husband [33M] + toddler [1M].) From basic research, I can find a comparable marketplace plan for about $1,500/month. We pay 80 percent of premiums through the company, but that is counted as wages on our W-2. The tax benefits to the S-Corp may balance out, but that’s not really why I’m here. Things went sour this week with our partnership. I discovered an email that my business partner sent to a potential client complaining about me and my personal financial situation (I used my own accountant for taxes rather than the business’s CPA + I cashed out my retirement to pay off my mortgage to take advantage of the COVID-19 allowance). It became very clear that my business partner does not respect me or my husband. I’d like to sell/redeem my share in the business and continue as a sole proprietor or single-member LLC. How will that work with our employer plan? It looks like open enrollment runs through May 15. Is this my window? Should I be looking for clauses in my plan somewhere about dropping coverage? My business partner is the plan administrator, so I unfortunately do not have access to much more than is on my portal right now. If I leave the business or at least drop the health care option, my business partner will no longer be eligible for the employer plan (it requires at least 2 W2 employees). I’m struggling with that, but I think I need to acknowledge that it is not my responsibility to insure my business partner’s family.
submitted by /u/stupidmillenial1 [link] [comments]Read Morer/HealthInsurance