Today, Zane Benefits, the number one online small business health benefits solution, published new information on Section 105 owner eligibility.
According to Zane Benefits’ website, pure defined contribution health benefits are growing in popularity. They are a new way to offer health benefits without the cost or complication of group health insurance. The simplest way to think about pure defined contribution is that it's an allowance employees can use on health insurance -- just like a business expense account.
Many business owners use a Section 105 medical reimbursement plan to increase their personal and business tax savings..
Section 105 Eligibility: C-Corporation Owners
C-Corporation owners may participate in the plan, and receive reimbursements 100% tax free. C-Corp owners may use the plan to reimburse his or her insurance expenses, as well as family members.
Section 105 Eligibility: Sole Proprietors
Sole proprietors may participate in a Section 105 plan platform for tracking purposes, but will not receive reimbursements tax-free. However, if the sole proprietor is married, and the sole proprietor's spouse is a W-2 employee, then the sole proprietor can receive the benefit tax-free.
Section 105 Eligibility: Partners
Similar to sole proprietors, partners may participate in the Section 105 plan platform for tracking purposes, but will not receive reimbursements tax-free. However, if the partner is married, and the partner's spouse is a W-2 employee (but not a partner), then the partner can receive the benefit tax-free.
Section 105 Eligibility: S-Corporation Owners
S-Corporation owners that own >2% of the company's shares and their spouse, parents, children, and grandchildren, may use the Section 105 plan platform to track medical expenses, but will not receive reimbursements tax-free.
Section 105 Eligibility: LLC's
If the company is an LLC, owner participation varies based on the way the LLC files taxes.
Section 105 Eligibility: One-Person Nonprofits and Churches
One-person nonprofits and churches may participate in an Section 105 plan and receive reimbursements 100% tax free. The plan may be used to reimburse his or her health insurance expenses, as well as family members.
About Zane Benefits
Zane Benefits was founded in 2006 to provide a revolutionized SaaS (Software-as-a-Service) administration platform ("ZaneHealth") for defined contribution health care. The flagship software provides a 100% paperless administration experience to small businesses and insurance professionals that want to offer better health benefits without a traditional group health insurance plan at lower costs. For more information about Zane Benefits, visit http://www.zanebenefits.com.