BASE^® Blog

BASE® knows it can be challenging to prepare and file Form 5500, especially when employers do not know that the benefits, such as medical and dental, may require separate filings from their retirement plans.  When something is this important, it deserves the help of qualified professionals to make sure the appropriate Form 5500 is filled out, prepared, and submitted. 

The Form 5500 is an annual report of Employee Benefit Plans, filed with the US Department of Labor, used to report important information regarding employee health and welfare benefit plans.  This form ensures that employee benefit plans are administered and managed in compliance with certain standards, and that all participants and their beneficiaries, have been given or have access to information about their plans.  A business’ forms are due the last day of the 7^th month of the plan year, which means the deadline is quickly approaching for most plans.

The BASE® 5500 Solver helps employers effectively prepare and file the Form 5500.  This comprehensive compliance solution generates custom compliant documents that allow employers to easily prepare and file electronically each year.  This innovative solution is for employers with 100 or more employees who provide health and welfare benefits to their employees. 

It is important that businesses who qualify to submit Form 5500 Series forms and schedules prepare, file, and submit in a timely manner to avoid steep penalties for failing to comply with this regulation.  The penalty for failure to file Form 5500 series has increased to $250 per day, but to not exceed $150,000. 

Our team at BASE® can help any employer that is required to prepare, file, and submit the Form 5500, to do so in a timely manner and avoid steep penalties, as well as administer any other health and welfare benefit plans that fit their business’ needs. 

For more information on the BASE® 5500 Solver, contact BASE® at 888.386.9680 or visit www.BASEonline.com. 

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Being able to provide an enhanced benefits package to employees isn’t just pure luck.  It takes a few steps, but then the employer is well on their way to saving valuable tax dollars and providing their employees with additional funds to combat the rise in health care. 

The Excepted Benefit Health Reimbursement Arrangement (EBHRA) is a cost-effective way that allows employers who offer a group health plan, to reimburse their employees an additional amount of money for premiums paid towards excepted benefits that are not covered by the traditional group health plan.  Excepted benefits are COBRA, dental, vision, short-term medical plans, and other qualifying out-of-pocket medical expenses. 

The BASE® EBHRA is for businesses of all sizes looking to maximize their tax benefits while expanding the benefits they offer their employees.  To enroll, employees must be offered the employer-sponsored group health plan, but do not need to enroll in it to participate in the EBHRA. 

How does the EBHRA work?  Check out the [lucky] 7 steps below:

1. Employer calls BASE® to enroll in the EBHRA
2. Offer employees the option to enroll in the employer-sponsored group health plan and the EBHRA
3. Employer establishes the reimbursement limit and the list of qualified expenses
4. Employees enroll in the EBHRA
5. Employees pay for their excepted benefits incurred by them and their dependents up to the maximum limit established by their employer
6. Employees submit a request for reimbursement with the required documentation
7. Employees receive reimbursement

With the Excepted Benefit HRA, it isn’t just the employer or employees that get “lucky,” they both benefit!  An employer has another way to maximize savings and tax benefits with all reimbursements being 100% deductible as a business expense.  Employees now have additional money to put towards their health care expenses that are not covered by their health insurance. 

For more information on the BASE® EBHRA, contact BASE® at 888.386.9680 or visit www.BASEonline.com. 

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So many great businesses start small, and many choose to stay that way.  As a self-employed business owner, understanding and running your business is your life.  Being detail oriented and a visionary with your business when you wear so many hats, can sometimes mean there are some big picture items that fall through the cracks. One of those items might be health care expenses for your health and well-being, which could lead to thousands in missed tax savings for self-employed business owners.

What BIG PICTURE item can save self-employed business owners thousands in tax savings each year on health care spending?  The answer is the Section 105 Health Reimbursement Arrangement, which is an employer-sponsored health benefit plan that allows small business owners the opportunity to deduct up-to 100% of health care costs, such as individual insurance premiums and out-of-pocket health care, dental, and vision expenses, on a tax-free basis. 

The BASE® Section 105 HRA is especially applicable to the small business owner who can legitimately hire their spouse.  It helps to reduce the cost of health care insurance premiums and out-of-pocket health care expenses while saving money by not paying taxes on the reimbursement for eligible expenses.  On average, BASE® clients save $5,900 a year in valuable tax savings. 

The BASE® Section 105 HRA gives the self-employed business the best possible health care reimbursement plan.  The first requirement?  One employee only.  The second requirement?  Operate the business as one of the following:  Sole Proprietor, Partnership, C Corporation, or S Corporation. 

For example, when a self-employed business owner legitimately hires their spouse to work in the business, the employee-spouse purchases family health insurance coverage, and the business owner enrolls in the BASE® Section 105 HRA.  They reimburse their employee-spouse for their health care expenses, such as health insurance, copays, and other health care expenses not covered by the insurance.  The health care expenses will be incurred by the employee, the employee’s spouse (aka self-employed business owner), and the employee’s dependents.  BASE® will do the math – calculating in the federal tax bracket, the self-employment tax bracket, and state tax bracket, finding the self-employed business owner thousands of dollars a year in valuable tax savings. 

In the “BIG PICTURE” of things with the BASE® Section 105 HRA, personal health care expenses are turned into a business deduction.  The plan reimburses the employee-spouse for their family health care expenses tax-free, turning the reimbursements into a business expense on the tax return as an employee welfare benefits. 

BASE® can show self-employed business owners the “BIG PICTURE” and provide insight into the future savings that could be with this plan in place when it comes to the Section 105 HRA.  For more information contact BASE® at 888.386.9680 or visit www.BASEonline.com. 

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