Saturday, November 19, 2016

Benefits Make Sense Even Without a Group

When I had a number of employees, I used to always offer them benefits. There are two major reasons for this. First, it saves me some money (personally) because I get my insurance paid for through the company. It’s a very well accepted business expense and I get insurance out of the deal. Second, it makes your business a nicer place to work. It makes employees a bit “stickier” compared to places that don’t offer benefits.

But times have changed. When I got rid of my I.T. consulting business and moved to book publishing full time, I was down to a “group” of one. It was difficult to find a good set of benefits for just me. With the Affordable Care Act, I couldn’t be turned down. So, I finally have the coverage I want.

“Benefits” are things like retirement plans, medical insurance, vision insurance, dental insurance, and so forth. Many people hold on to their corporate jobs and run a consulting business “on the side” because they need the benefits.

You don’t have to do that anymore – especially since a lot of companies are not actually providing these things. They’re making them available for you to buy through payroll. They’re negotiating a price but the employee is paying for it.

To be honest, that’s a great reason to take the plunge, find your own benefits, and jump ship.

Where Do You Get Benefits? 

That’s a tough question to answer because the answer is almost anywhere. If you use a payroll service, they may offer certain benefits, including health insurance and miscellaneous retirement savings plans. Your financial advisor (including accountants and enrolled agents) may also offer some benefits such as life insurance and retirement plans.

Of course you can also go direct to a broker who has lots of options available. Or a certified financial planner may also offer some or all of these things. In the modern economy, many people are choosing to buy each of these benefits separately. Additionally, some insurance companies (like VSP Vision Care) are offering individual plans that you can purchase directly from them.

My medical insurance plan comes bundled with almost-useless add-ons for optical and dental coverage. The vision coverage has a $100 co-pay for exams and $500 deductible for glasses. That’s about equivalent to no coverage at all! The bundled dental is a little better, but the out-of-pocket is still pretty high. In both cases, I went with separate plans for these things.

The main benefit you have as a sole proprietor (or small corporation, LLC, etc.) is that you can claim exemption from Workers Comp in many cases. If you are already paying for medical coverage for something else, you can exempt yourself from WC insurance as an owner of the business. Note: If you’re not doing this, you should talk to your tax advisor and Workers Comp insurer to see whether you are eligible to save this money.

Expandable Programs

You have to make sure that any benefit programs you offer are equitable inside your company. In other words, if you have employees, you have to offer the same thing to everyone who meets certain criteria. You can set the criteria, but you still need to be aware of the laws.

For example, you might say that employees are eligible if they have been employed at least 90 days and work at least 30 hours per week. What you can’t do is to have different programs for owners and employees.

If you are sure you’ll never have employees, then don’t worry about what you choose. But if you might have employees, then make you work with a company that can grow along with you. As strange as it sounds, I’ve see companies that had plans for one person or three-or-more, but not for two. Huh?

Again, you need to work with good advisors who will make sure you get a combination that works – and keeps you inside the law.

I’ve been self-employed for 21 years. I’ve grown companies to a dozen employees. So I’m not willing to bet that I’ll always be a one- or two-person operation. And with luck, my choices for benefits will last me for years to come.

VSP – Vision Service Plan

I recently found out about a great resource guide from VSP – Vision Service Plan. VSP provides vision insurance for the smallest shops out there, including one-person businesses. Their resource guide is at this link. I asked them if I could promote this. (I was compensated for this blog post.)

The resource guide provides lots of valuable information, including a thorough understanding of the "gig" economy - made up of individuals working independent jobs. If you’re a sole proprietor, this is you. In fact, our industry has been doing exactly this for twenty years – way before Upwork (formerly Elance and Odesk) hit the scene.

It also includes information on VSP Individual Vision plans, which start as low as $17/month. VSP individual plans are perfect for sole proprietors, since they can be purchased directly from VSP at I bet 90% of the people reading this wear glasses. If you're in need of vision insurance, I encourage you to check out VSP individual plans.

For more information on VSP, click this link.

About VSP

VSP is the national leader in eye care benefits, and offers affordable individual vision insurance to people who don’t have employer-provided vision care. VSP serves 72 million Americans through individual and group plans. (That’s one in five people in the U.S.!) Individual vision plans can cost as low as $17 a month and members give the company a 95% overall satisfaction rating.
A VSP individual vision plan includes annual benefits that cover:
A comprehensive eye exam
Prescription lenses with covered lens enhancements
A generous allowance for frames and/or contacts
A wide selection of brand name frames
Access to a network of more than 36,000 doctors


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