Group health insurance is an essential part of employee benefits planning. Every year employers across the United States must handle new sets of health insurance premiums base on the group’s risk factor and claim history.
Subsequently, an employer has to update payroll deductions for each participating employee anytime health insurance is renewed. This revision allows the employer and employee to update life-changing information such as adding a spouse or dependent or opt-out annually.
Employer-sponsored health insurance is also called group insurance, typically subsidizing pre-determine percentage towards the premium cost. This Pre-determine employer cost leaves employers vulnerable to improper clerical errors related to enrollment and plan maintenance. Employers must be diligent when updating or communicating annual health insurance payroll deductions for each employee.
The risk of employers overpaying insurance premium is very high if the payroll deduction is not reviewed often and corrected if necessary.
Please note that Health and accident insurance premium paid on behalf of a greater than 2 percent S corporation shareholders also an employee are deductible by the S corporation and reportable wages on the shareholder-employees W-2. These added wages are subject to federal and state income tax withholding but not social security and medicare or unemployment.
For more information, contact Intrinsic DM², Inc at info@intrinsicdm2.com or call at 630-200-7575.