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Side stepping Obamacare?

I'm pretty concerned about the cost of complying with Obamacare. My wife and I are both 25, no kids, and earn well over 400% of the poverty level. We both own and operate small business's and do very well for our age. That said we are starting out in life and business, so basically everything we make is reinvested.

Right now we have basic catastrophic coverage which cost approx $1,200 annually(10K deductible). I feel that is a acceptable amount to pay for two young people. No alcohol, no tobacco, and no history of illness of any kind. We take care of our bodies and have never had any significant medical bills.. Same for my parents who are now in their mid 50's.. Nothing more than the standard $65 doctor bill and a round of antibiotics.

Now I'm hearing that Obamacare is going to force insurers to offer more benefits that we don't need and will likely cost 5-10K annually for the two of us.. That's incredibly stupid IMO... We literally spend approx $500 annually on checkups and medication. That will likely not increase unless we have some unforseen catastrophe..

Here's my question... Currently my business is set up as a LLC and all the funds come back to me personally for tax purposes.

Would it be possible to restructure my business as a S-Corp and have the S-corp pay me a salary of say 30-40K annually? The rest of the funds would stay in the business and would be allowed to grow the business.

I've heard this is a pretty common practice to avoid paying self employment taxes already?

My thinking is that we really only need about 30K a year to live on. Coincidentally that would put us down in the poverty level to qualify for subsidized healthcare. Hoooray free healthcare!

4 Answers

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  • 8 years ago
    Favorite Answer

    You cannot do that because any net income from a S-corp is grouped with your salary. Double check with a CPA.

    What state do you live? So far, one state has posted prices. Is your insurance mini-med insurance? If it is, it is substandard insurance and you should get real insurance.

  • ?
    Lv 7
    8 years ago

    If you earn over $88K per annum you wont get any subsidy tax credit but you can buy insurance from the exchange when it is available and choose the type of coverage you want. There must be a reason you have catastrophic insurance like a serious illness. Regular health insurance wont cost more than a few hundred a month with a much lower deductible, comparable to group rates through employer. I dont know if you are talking about individual or employer insurance if you have more than 50 workers. If you dont, you dont have to offer any insurance just like now.

    Here is a website from a business management perspective.

  • 8 years ago

    Obamacare is the biggest BS of all. There are a lot of clauses that make it harder for people.

    Here is another example:

    Someone that works a near minimum wage salary will end up working 2 jobs over 6 days a week, just so companies don't have to supply health care.

    Maybe we should start taking responsibility for ourselves and not let the government make it for us.

    Whats next?? Government outlawing cheap toilet paper b/c it doesn't feel good. Or just another bankrupt city, b/c government knows best.

  • ?
    Lv 7
    8 years ago

    Do what you have to.

    Socialized Bongocare is a travesty. I'm sorry our country failed you in this regard.

    Source(s):
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