VISTA Health Solutions

One way of keeping health insurance costs down is to practice preventive medicine.  When people do their part to prevent illnesses from happening they in turn, help not only themselves from becoming sick, they prevent contagious diseases from affecting their family, co-workers, and the community at large.  Prevention can save money for doctor visits and medical treatments.

The high cost for health care affect everyone, but it especially affects the self-employed and the small business owner.  Small businesses pay very high premiums for their policies already but that is only half of the story.  When a self-employed individual is out of work that means loss of salary especially if the self-employed person has no one else to run to business.  When you are working independently you can lose your contracts because you are too ill to work.

Though no one can know when you will be ill, if at least you take the necessary precautions to keep yourself reasonably healthy you can continue to work. One thing you need to do as a self-employed individual is to make sure you take your flu shots.  Several federal government agencies have announced that they will help business owners to prepare for H1N1 and regular flu vaccines in 2009.  It is important for everyone’s health care to make sure that all employees remain healthy.

In a small business, whether there is one employee or 20 all employees are needed to keep the work running smoothly and no small business owner can afford to have anyone, including themselves off from work because of the flu.  Furthermore, just one person was the flu could pass the virus on and infect everyone.  This would cripple production and in small companies it can cause a stand still.

Small business owners concerned about the health care of their employees should encourage everyone to get the flu vaccine, wash their hands thoroughly in order not to spread any virus, and consider canceling any non essential travel or meetings where they can pick up the flu from others.

One the other hand, the self-employed business person should advise their employees who have the flu to stay home in order not to infect others.  Wherever possible employees could work from home and thus still have some wages to fall back on. If your employees appear to have flu like symptoms send them home, better to have one employee out then your whole staff.  It would be beneficial for the small business owner to cover flu shots or partial flu shots and have a nurse come into the business to administer treatment.  If the small business owner has sick leave insurance that is wonderful. In the long run the consequences for time off work for both employee and employer will run much higher than the cost of carrying a policy.  Prevention is the best medicine and proper insurance and flu shots can save your company from losing irretrievable lost profits and financial setbacks.

Freelance writers, photographers, artists and other self-employed individuals and small business entrepreneurs qualify for a valuable tax break on what they are currently spending for medical health insurance coverage. The self-employed and small business entrepreneur needs to reminder that the cost of medical insurance keeps climbing. Worse yet, you have to absorb more of the health premium cost because so many charges are not covered by your insurance.

Unfortunately, this usually fails to measure up to a deductible size in the view of the IRS: As you laboriously list your itemized expenses on Schedule A of Form 1040, you will find that the only expenditures deemed allowable are those exceeding 7.5% of your Adjusted Gross Income or AGI, the figure on the last line of page one of the 1040 form. However, the self-employed and the small business entrepreneur are able to deduct 100% of their low cost health insurance premiums for themselves and their spouses and dependents without any regard to that 7.5% allowable threshold. At www.writefromhome.com they explain in detail who qualifies.

1. Self-employed individuals and small business entrepreneurs whether they operate their businesses or professions as sole proprietorships, partnerships, or limited liability companies do qualify to now take the deduction annually.
2. The S corporation shareholders owning more than 2% of the stock are eligible. S corporations are institutions, taxed much the same way as partnerships are, that pass profits through to their shareholders.

This deduction for the annual affordable health insurance for self-employed individuals and small business proprietors is not subject to the 7.5% threshold for all other medical expenditures. This mean the deduction avoids the Schedule A, where expenses are itemized, but is on the first page line 29 of the Form 1040. The self-employed and small business medical insurance deduction is available even to someone who foregoes itemizing altogether and instead simply uses the standard

The amount you deduct for insurance coverage do not reduce self-employment income when filling Schedule SE or Self-Employment Tax of Form 1040 to compute the net earnings minus the health insurance deductible from self-employment. The computation on that schedule is strictly on Schedule C, on which you report your self-employment receipts and expenses to arrive at a net profit.  This is just one example of how the federal laws have evolved over the years. Only a few years ago the self-employed and the small business proprietor were absorbing the total annual cost for medical insurance premium coverage, whereas today they are able to deduct the cost.