Owner and Partner Health Insurance for Professional Firms
In a professional firm the people who run it are also the people on its plan, and the rules for them differ from the rules for employees. Partners, shareholders and members are not always treated the way a staff member is.
This page explains the owner questions that come up at law, accounting, engineering and consulting firms, so partners can ask their tax adviser the right things.
Owners Are Covered Differently.
Where Owner Coverage Gets Complicated
- Partners in a partnership are generally not employees for tax purposes, so premiums for partner coverage follow different rules than premiums for staff.
- Shareholders in an S corporation who own more than two percent are treated like partners for these purposes, and their premiums are reported accordingly.
- A firm with only owners and a spouse may not qualify for a group plan the way a firm with W-2 employees does.
- Owners often want a different design than staff, such as a high-deductible plan with a health savings account.
What CFH Does About It
- Confirms how your firm is organized and who counts as an employee, working with your accountant and attorney.
- Designs the plan so owners and staff can have different options when classes are properly defined.
- Explains the account-based choices owners use, such as a health savings account or a reimbursement arrangement.
- Keeps the plan documentation consistent with the tax reporting the firm files.
How Owner Coverage Changes by Firm Size.
A two-partner firm and a thirty-partner firm face different structures and a different mix of rules.
A very small firm may have owners and a spouse as its only participants, which limits group options.
What we do about it: We confirm eligibility early and offer alternatives when a group plan is not available.
A mid-sized firm needs a clear rule for partners, income partners and associates.
What we do about it: We write class definitions and coordinate the tax treatment with your accountant.
A large firm has a partnership agreement and a benefits committee.
What we do about it: We provide plan comparisons and documentation the committee can approve.
Three Services That Fit Owner Coverage.
Each of these is a CFH service page that applies when owners are on the plan.
Executive Medical Reimbursement
Section 105 plans for owners and executives, delivered as CFH’s own service.
Benchmark The Plan
Compare your plan with similar firms before the partners vote on the renewal.
Compliance Calendar
Keep notices, filings and plan documents on a calendar someone owns.
Owner Questions, Answered Plainly.
Can partners be on the firm’s group plan?
In many cases yes, but the tax treatment differs from employee coverage, and eligibility can depend on whether the firm has W-2 employees. We confirm the rules for your structure with your accountant.
What is an executive medical reimbursement plan?
A Section 105 plan lets an employer reimburse eligible medical expenses for covered employees under written plan terms. CFH offers these plans. Eligibility and tax treatment depend on the structure of the business, so we work with your accountant.
Can owners have a richer plan than staff?
Different classes can have different options if the classes are defined by bona fide job-based criteria and applied consistently. We write them with your counsel.
Send Us Your RenewalBack to Professional, Scientific, and Technical Services
Related Guides.
Professional Services Hub
The sector overview for professional, scientific and technical services.
Law Firms
Partners, associates and staff on one plan.
Accounting and CPA Firms
Benefits through tax season and busy-season hours.
ICHRA for Professional Services Firms
When a defined-contribution approach fits a firm.
The Laws Behind This Page.
Self-Employed Health Insurance
The tax code provision behind how partners and certain owners treat health premiums.
Accident and Health Plans
The tax code provision for employer reimbursement of employee medical expenses.
Send us your renewal.
We’ll tell you whether it looks competitive, where we see opportunity, and the five questions we’d put to your carrier. No cost, and no obligation to move anything.
The renewal letter
Your current plan summary
Contribution split by tier
Enrolled counts by tier
Four documents — two more if your group is 50 or more. Nothing else; every extra one is a reason to postpone.
An independent employee benefits consulting firm. We look at the entire benefits program — cost, plan performance, risk and administration.
Switch to CFH. Unhappy with your broker? Your employees won’t notice. You will. →