Sally owns a small C corporation that has provided health
insurance coverage for Sally and the company ‘s three other emp loyees. The
insurance coverage for Sally and the three employees is individual coverage,
not family coverage. Sally’s own family coverage is through a separate private
policy. She pays the premiums out of after-tax dollars. Sally’s salary is
$40,000 and the salary for the other three emp loyees averages $30,000. The
premiums on the health insurance policy average $5,000 per employee per year.
The provider recently informed Sally that the premiums will increase to $8,000
per employee. The spouses of her two married employees have coverage through
their employers. The third employee has announced that he will marry soon and
would very much like to have family health insurance coverage . The insurance
provider says that family coverage will approximately double the premiums.
Sally is finding the cost of providing medical insurance coverage particularly
burdensome for her small business. What planning suggestions can you offer?
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