Affordable healthcare and coverage is important to everyone. Increasing insurance costs are at the forefront of most American minds, especially those in agriculture. Between the cost to run the modern day farm and the rising cost of health insurance, many farms with full-time employees are having trouble keeping up with the cost it takes to provide healthcare for their employees. According to a 2016 Employer Health Benefit Survey by the Kaiser Foundation, the likelihood of offering health benefits differs significantly by the number of employees, with only 46% of employers with 3 to 9 workers offering coverage while virtually all employers with 1,000 or more workers offer coverage.
Recognizing that not everyone has the budget of larger businesses to sustain the cost of healthcare, BASE® has developed several solutions over the years to contain the cost of healthcare and make it more affordable. Knowing that in today’s world that the “one size fits all” concept isn’t suitable when it comes to healthcare, BASE® has a Health Reimbursement Arrangement (HRA) to fit varying sizes and needs.
The Section 105 HRA is for the husband and wife looking to take care of their family healthcare needs. Plan users can deduct up to 100% of out-of-pocket medical expenses and health insurance premiums. Our average client saves over $4,700 in tax dollars each year.
This plan is for employers with a group health insurance plan in place and who want to reduce the overall cost of their insurance coverage. This provides great options, as it can help reduce premium increase by 10-50%. This is a great solution for farmers who want to save money on their established group plan, making it more affordable for both the employer and their employees.
The QSE HRA is the most recent reimbursement plan that BASE® has brought to the marketplace. If a business does not have a group plan in place for employees, the BASE® Qualified Small Employer Health Reimbursement Arrangement (QSE HRA) gives farmers and other small businesses a chance to provide coverage for their workers. Small businesses with less than 50 full time employees have the opportunity to help employees pay for qualified medical insurance for the employee and their family, tax-free. Employees can use the money for insurance premiums, co-pays, deductibles, eye care, dental care, or any other qualified medial expense. The amount provided is tax-free to the employees and 100% tax deductible to the employer. Employees have the ability to secure their own medical insurance, which is ideal for those in agriculture looking for an alternative to group coverage.
While all Americans are faced with the rising cost of healthcare, it seems farmers are being affected most. The CPA Practice Adviser “Farmers Face Soaring Health Care Cost” stated:
- 10.7 percent of U.S. farm households had no form of health insurance, compared with 9.1 percent of the general population, according to a 2015 U.S. Department of Agriculture study.
- Farm households are slightly more likely than their general population to secure their own insurance, rather than obtain it through an employer, according to the USDA study.
- Rising health insurance costs, coupled with low crop and livestock prices and poor farm profitability, leave farmers and ranchers less money to spend at their local businesses.
The HRA is just one way BASE® is helping farmers address one of their top concerns and offset the cost of their healthcare needs. BASE® client Pam B., who is an Iowa farmer, vouches for the HRA, “The most important thing to me is that the HRA makes our health insurance and other health costs tax deductible. Being self-employed and working on the farm can make those costs quite a large expense.” Visit BASE® to explore HRAs in more detail, along with other measures available to make healthcare more affordable.