Owning the company doesn't come with a group plan. Here is how owners of one-person LLCs, S-corps and small shops are buying coverage and keeping the cost in check.
Hi, I'm Sam Jaber. I'm a licensed broker in Tampa, and I help people who run their own companies: one-person LLCs, S-corps with a spouse on payroll, shops with a couple of helpers. I'm licensed in 36 states and I do all of it by phone.
Owners usually ask me two things right away. Can the business get a group plan? And can the business pay for it? The answers depend on how your company is set up, and they're often different from what people expect. Here's how owners in your position are working through it and paying less.
The first is about where you buy. If your company has no employees other than the owners and their family, your coverage comes from the individual marketplace. Hiring at least one employee who isn't an owner or a relative may let you use the small-business marketplace, known as SHOP. People you pay on a 1099 don't count as employees for this.
The second question decides which path is yours: does your household income qualify for a subsidy on the marketplace? For a sole proprietor or a single-member LLC, that starts from net profit after business expenses. For an S-corp owner, both the salary you pay yourself and the profit that flows through to your personal return count. Your household's other income counts too.
Help ends at four times the federal poverty level, which for one person is a figure in the low $60,000s, and higher for each person in the house. Find your spot below.
Lots of owners land here in the first few years, or in a year when they put most of the money back into the company. If that's you, the marketplace is usually where the most affordable plans are, because the credit only works there.
The catch is that you're estimating profit for a year that hasn't happened yet. Use last year's return plus what you know about this year's contracts and costs, then update the marketplace if profit shifts in a big way. Underestimate and never adjust, and you can owe some of the credit back when you file.
Next step: Book a call with last year's return handy, and we'll set an estimate and pick a plan that fits it.
Once profit pushes you over the line, the credit is gone and the marketplace charges full price. For an owner covering a spouse and kids, that bill is often bigger than the business wants to carry.
Healthy owners have another route: private plans that use medical underwriting. You answer health questions, and approved applicants are priced with their health in mind, which often lands well below the full marketplace price. These plans are built on PPO networks with national reach, so a client trip or a family vacation doesn't put you outside the network.
Know going in that your health answers decide the outcome. You can be approved, declined, or approved with a prior condition excluded. Benefits also vary by plan, so we go through each one line by line before you commit.
Next step: Call me and I'll compare a nationwide PPO quote with the full marketplace price for your family, side by side.
If a family member has a chronic condition, a recent diagnosis or expensive prescriptions, the marketplace is usually the right place even at full price. It can't turn anyone down or raise the price because of health. An underwritten plan can do both.
The savings come from choosing the right marketplace plan rather than the first one you see. We look for the plan that keeps your family's doctors and covers the medications they depend on, with a deductible the company's cash flow can absorb.
Next step: Send me the doctors and prescriptions that matter most, and I'll show you which plans cover them.
If you've been building the business on the side, your employer's plan probably ends when you walk out the door. Losing that coverage gives you a special enrollment period, usually 60 days, to sign up on the marketplace. COBRA is the other choice, but if you elect it and later drop it voluntarily, you don't get a new window. Make that call before you sign the COBRA paperwork.
Your first year running things full time is also the hardest to forecast, which ties straight back to the subsidy question.
Next step: Reach out before your last day, and we'll have the new plan ready to take over when the old one ends.
Owners often figure a PPO went away when they left a big employer, especially where the marketplace sells only HMO and EPO plans or prices its PPO out of reach. It didn't. Through me, you can get a nationwide PPO in each of the 36 states I'm licensed in. If you're healthy, let me price one for you.
This is ultimately a question for your tax preparer, and I'll send you there. What I can share is what the IRS instructions say in general. The self-employed health insurance deduction is available to sole proprietors, partners and S-corp shareholders who own more than 2%, and it can't exceed your net profit from the business. For a more-than-2% shareholder, premiums the corporation pays or reimburses are treated as part of your W-2 wages. Months when you could have joined an employer-subsidized plan, including your spouse's, don't count.
For our call, it helps to have:
My help costs you nothing. The insurer pays me after you enroll.
Straight answers, no sales pitch.
What matters is how the business is taxed. Sole proprietors, partners and more-than-2% S-corp shareholders can generally take the self-employed health insurance deduction, limited to net profit from the business. Ask your tax preparer how it applies to your setup.
On the individual marketplace, or through a private plan outside it. The small-business marketplace is for companies with at least one employee who isn't an owner or a family member.
There's no free plan set aside for LLC owners, and having an LLC doesn't change where you buy coverage. If your household income qualifies, the premium tax credit can bring the cost of a marketplace plan down a lot.
Yes. When you're healthy and your income is too high for a subsidy, private plans built on nationwide PPO networks are an option, and I can set one up in any of the 36 states where I'm licensed.
How the business is set up, roughly what it netted, and who needs coverage is all I need to start. I'll tell you which path fits and what it costs, and if the plan you have already makes sense, I'll say that plainly.
Small-business owners in your state
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