Basics, startups, and COBRA

[Guest gconrad]

I've been online for several hours trying to understand - this is the best site I've seen and I hope someone can help a beginner.

We are a new, charitable, tax-exempt enity organized as a trust. We have a single employee. We'd like to offer him health insurance as a benefit. However, we're building everything from the ground up, and are not in a position to arrange a formal group plan with an insurance company, or analogous solutions yet.

I gather that our trustees could set up a "plan" under which we agree to pay the insurance premium of our single employee's existing, individual insurance plan, and that he, therefore, would not have to consider those payments as income. We would pay it directly to his insurance company on a policy that he owns himself. Does anyone know of anywhere I could get some practical guidance on what such a "plan" should look like?

And could we also begin making his COBRA payments for him until we get going?

Extreme appreciation, in advance

Glenn Conrad - Shanti Foundation

[mroberts]

As far as what the plan looks like, contact a local insurance company. They usually only have a couple of different individual plans that you can purchase to keep things simple. In Maryland, BCBS is a big player. I think they're called Freestate up there or something like that. If you want, you can send me an email and I can work with you on it a little. I have a contact at that BCBS and I'm sure we can get something worked out.

As far as the tax implications go, I'm going to hand this one off to someone else. I would assume that since you only have one employee that it would not be considered taxable if you were to pay his insurance. If you have several employees, however, and do not pay for their insurance, it would probably be a different story.

Take Care!

Matt

matt.roberts@bbinsurance.com