Fortunately for those in California, any small business with two or more employees that's been around for 3-6 months (incorporate early) can get group coverage at fairly normal rates.
You just go to an insurance broker or provider, pick your plan, and you're all set up in a month or two. The employees do have to fill out medical questionnaires, but regardless of whether they are healthy 25-year-old men or they all have super-cancer, the outcome is a foregone conclusion -- "Approved, 1.10." That means your company pays the statutory maximum of 10% over the typical rates for larger groups.
Because, and of course only because, that's California law. Your company cannot be turned down even if none of your employees would ever qualify for personal coverage.
Yes, this is basically corporate welfare for the benefit of the employees. But it mostly overcomes the health insurance objection to starting a small business, so as far as I'm concerned it's fantastic.
There's an important part you neglected -- only people employed with your company for 6 months count, including founder(s). So if you found a startup, you have to wait 6 months to apply and pay COBRA in the interim.
In the end, we decided it was cheaper to go with individual plans until we grow bigger.
If your S-corp pays for health insurance for employees or dependents, that is an "above the line" deduction and is not subject to payroll taxes (although not outright deductable from income). See an accountant as these laws are changing the past couple years.
You just go to an insurance broker or provider, pick your plan, and you're all set up in a month or two. The employees do have to fill out medical questionnaires, but regardless of whether they are healthy 25-year-old men or they all have super-cancer, the outcome is a foregone conclusion -- "Approved, 1.10." That means your company pays the statutory maximum of 10% over the typical rates for larger groups.
Because, and of course only because, that's California law. Your company cannot be turned down even if none of your employees would ever qualify for personal coverage.
Yes, this is basically corporate welfare for the benefit of the employees. But it mostly overcomes the health insurance objection to starting a small business, so as far as I'm concerned it's fantastic.