Hi Scott, So I assume since you’re becoming an employee that by “partner” you mean a domestic partner and not a business partner in the LLC. This response is based on that assumption…

A single owner LLC is probably treated as a sole proprietorship typically so the member/owner just uses the usual rules for a sole proprietor. Basically, unless the business has a health insurance benefit for employees, that means the owner buys his own insurance (for him, his spouse and any dependents) and claims that insurance as a deduction using the self-employed health insurance deduction.

I don’t think you can get coverage under that plan, though. As noted, you need to either be a spouse or a dependent.

So I would think the options the LLC owner wants to look at are maybe setting up a health insurance plan for employees. Something like the qualified small employer HRA might be worth considering. More info here:

http://evergreensmallbusiness.com/qualified-small-employer-health-reimbursement-arrangement-rules/

BTW, if the LLC is treated as an S corporation for tax purposes, the accounting works a little differently, but you get the same place:

http://evergreensmallbusiness.com/payroll-accounting-rules-for-s-corporation-shareholder-health-insurance/

A final question is what you do for your health insurance if you don’t get coverage through the LLC as your new employer… That’ll need to be a regular individual policy…

His company is listed on CONCORD as a Domestic Limited Liability Company with himself as the Sole Owner. He has a handful of part-time employees. I’ll probably be joining as his first full-time employee.

What are our options for insurance for ourselves at this point?

Thanks!
Scott

Happy Holidays to you too!

So I think in that case, you basically say that some of the shareholder-employee’s wages are for reimbursing them for their health insurance… and you flag that amount on the shareholder-employee’s W-2 in box 14.

However, if you have a situation where all the non-shareholder-employees get or could get an ACA compliant plan from employer, then I think in that case, you can still do the “old-style” bookkeeping for the shareholder employee as per the old notice.

I don’t know. And I’m not sure (now at the time I’m replying to your comment) that the IRS knows either…

I would advise clients without ACA compliant plan for other employees to add the health insurance to boxes 1, 3 and 5 of the shareholder-employee’s W-2 and then take as a self-employed health insurance deduction on the shareholder’s 1040.

BTW, we’ve been recently talking among CPAs in office about case where employer *does* have an ACA compliant plan for employees, but doesn’t cover shareholder-employees under that plan because shareholder-employees have another plan. I actually think until we get more guidance from the IRS that you could in this case treat the shareholder-employee health insurance in the old, pre-ACA manner… meaning you’d add health insurance to box 1 but not to box 3 and 5 of the W-2… and then that you’d take the self-employed health insurance deduction on shareholder’s 1040 return.

My logic here is that ACA didn’t eliminate the self-employed health insurance deduction so you do get to take the deduction. And further that the preceding approaches are the obvious and safe way to handle the bookkeeping.

I think you have 56 employees. So you’re going to need to provide ACA compliant health insurance starting in 2016.

My company has 49 full time employees and 7 partners that are also working total 56 employees. All partners are 2% or greater S Corp.

1- Do I count the partners as employees to determine if we are a Small Group or a large Group?