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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.

http://www.rothcpa.com/archives/003260.php



Great point. It looks like the previous-quarter qualification is more complex than I thought.

I was on COBRA anyway when I started and stuck with Subchapter C so I didn't encounter these issues.

Definitely a strong argument for early incorporation if you can swing it.




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