Tax Practice / Health Insurance Issue

[bbrownatl]

I have a quasi tax question here (as it has related tax implications and strategies) I’m experiencing health insurance frustration. That said, I know many in this forum are one or two person firms. I’d love to get insight into what you deem as the best setup for health insurance. I’m a two-person shop (self with wife assisting). For insurance, we also two college age children and one out of college but he is on his employer plan. Through the years, we have gone from group plans (BCBS) to Short term medical (UHC Triterm) to Medishare to now a private First Health PPC plan. All moves driven mostly by the huge run up in premiums.

I love the Direct Primary Care (DPC) model and then perhaps just a major medical plan in the event of a serious injury or illness. I’ve heard many mention to just get a short-term plan with lower premiums (albeit lesser coverage) then if you get a serious illness you can immediately jump to a Healthcare.gov plan as they can’t deny you for a preexisting condition.

I welcome any and all input. Thanks so much

[TaxGuyBill]

I’ve heard many mention to just get a short-term plan with lower premiums (albeit lesser coverage) then if you get a serious illness you can immediately jump to a Healthcare.gov plan as they can’t deny you for a preexisting condition.

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You can't sign up for Healthcare.gov insurance outside of the Open Enrollment Period, unless you meet one of the special exceptions. And even if you could switch, it is sort-of too late if you are rushed to the hospital for emergency surgery that costs $120,000.

If you hire your wife as an employee, things like an HRA, QSEHRA or ICHRA could be options, which effectively could save SE tax (although saving SE tax usually means lowering your potential Social Security benefits, so that isn't always a good thing).

[kathyc2]

Like Bill said, you can't just "jump on" an ACA plan whenever you want.

2025 is the last year for expanded credits from IRA. Unless Congress passes something 2026 will revert back to no assistance for those over 400% FPL.

I would be extremely cautious with a short term plan. Vast majority of them don't cover things you would expect an insurance policy to cover. The reason they offer them as "short term" is so they can get around the comprehensive care and preexisting protections from ACA.

[bbrownatl]

Points noted on both responses above. Thanks so much for the input.