Entrepreneurial Benefit Solutions

Whether you’re an entrepreneur with a few staff, a solopreneur work on your own or a slightly olderpreneur, the benefit issues that you face are similar. Friends and family are major forces and you have more ideas than cash.

Since you likely take enough financial risk in your business it might be wise to reduce some of your personal financial risks with long-term disability insurance, travel medical insurance and catastrophic health care insurance.

If you’re into the second or third tax bracket you’re likely interested in turning personal expenses into business deductions. The easiest way to do that is to setup a health spending account.

The cost of a health spending account is determined by the amount of expenses you want covered plus an administration and taxes that total approximately 21.5% depending on your province of resident.

Corporations do not have limitations on their health benefit plans but proprietorship and partners are:

  • required to have to a professionally administered plan,
  • must cover all full-time employees,
  • are limited to a maximum annual deduction limit per employee is $1,500 plus $1,500 per dependent (spouse & child) 18 and older plus $750 per dependent child under the age of 18 if less than half of the employees are at arm's length (unrelated).

As your business grows and you recruit more staff, resist the urge to buy a traditional group insurance benefit package. Most employee benefit plans nurture a sense of entitlement that will be difficult to reverse. There’s a good chance your employee understand risk almost as well as you do. So customize your design a benefit plan to meet the specific needs of your company.