Health care question

[BobK]

My adult daughters will turn 26 soon. Can I make them employees of my small business to offer them health care benefits?
In PA, what requirements need to be met to legally consider them employees of the LLC?

[Pack-Secure]

You will need to check with your healthcare provider about adding them. You can make them employees, as long as they receive a W-2.

[vangogh]

I'm guessing you don't really need to hire your daughters for you business and the question is what's the minimum you need to do in order for them to be seen as employees in order to provide them health insurance. My apologies if my guess is wrong.

A few thoughts. It probably isn't all that difficult for an insurance company to show that your daughters aren't really employees. If that happens the insurance company probably won't have to cover them should the need arise and you could potentially be subject to fines at the least. Ask yourself if it's worth the risk.

I don't know the specific laws, but I would think at the least you would need to be paying them some kind of minimum salary for a reasonable amount of hours each week. Even if there's no specific law requiring it, it would be highly suspicious if you aren't. That means you'll also be paying taxes on that salary. Those taxes could be more than what you'd be saving in insurance. I don't know the specifics of how much it would cost and save, but I would think a lot about what if any savings there actually would be and whether or not it would be worth the risks involved.

[Freelancier]

Do you have a corporate health care "plan"? Have you discussed this with your company's insurance broker? They should be able to tell you what rules you need to comply with in order to offer any "employee" health care or other benefits. I'm guessing you'll have to show that they do work and receive pay for it on a regular basis and are listed as "employees" and get a W-2 at the end of the year.

If your business makes enough money, you might also talk to your CPA about whether you should set up an HRA to cover the things that your health insurance plan doesn't cover (like deductibles, co-pays, parking for doctor appointments, etc.).

If your kids are lucky and don't have pre-existing conditions, rates for individual plans for young people are pretty low (and they'll be lower than the equivalent corporate health plan costs, although not tax deductible). If they do have pre-existing conditions, they may have a bigger hill to climb to get affordable insurance still.

[Brian Altenhofel]

You might check the difference between a "group" policy and individual policy. My individual policy is significantly less expensive (and with better terms) than the group policies I had at previous jobs, as well as the group policies that have been offered to my business - with a pre-existing chronic condition.