captive insurance company taxation
Ask any business owner to his list of least favorite aspects of running the company and it is likely that the cost of insurance appear at some of your list – probably somewhere near the top. After payroll, the employer faces is the second largest expenditure in the country. This is even more pronounced for companies that build large have suffered through the recent difficult market for general liability. It talk less, but just as painful for the bottom line, is the continued rising costs of group health insurance. Add a significant number of employees to payroll and business owner is likely to bow – and irritated hit by rising costs. Unfortunately, statistics support their discontent.
In 2006 study conducted by the Health Research Educational Trust found that the cost of health insurance premiums has increased by a staggering 87% since 2000. That's 69% more than overall inflation. Total spending on health care nationally than $ 2 billion. The total expenditure of health care represents 16% Gross Domestic Product (GDP). With these costs are increasing at a 9% clip per year, compared with about 3% of gross domestic product is estimated by 2015 the cost of providing health care will consume 20% of the national economy, or more than $ 4 trillion!
There are several reasons for this worrying trend, the most pronounced of which are large inefficiencies in health insurance, along with state and federal mandates that require the Coverage is provided for essential treatment. The real victims are the companies that suffer from the law of large numbers. Companies that have a low accident have to subsidize the bad experiences of others.
Companies are often shocked when their first review of reports of health insurance with the use of a consultant. Most of these companies are paying between $ 300, 000 to $ 2, 000, 000 a year for their group benefits, only to have the real rights paid by the company are often 25% to 40% of the number. Sometimes it is as low as 10%, apparently this should merit a decrease rate. Unfortunately this is rarely the case. Their rates increase right along with everyone else … …. href = "http://riskmgmtadvisors.com/"> Cont
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About the Author:
R. Wesley Sierk, III is the President and Lead Strategist for Risk Management Advisors, Inc. He is an expert in executive compensation, corporate benefit planning, alternative risk transfer, and captive insurance formation and management. Sierk has more than 14 years experience helping highly profitable, closely-held businesses limit their risk exposure and taxes through qualified plan structures, onshore and off-shore entities, and trust arrangements. He works primarily with homebuilders, manufacturing companies, real estate developers, and sports and entertainment professionals.
To know more about this author visit http://riskmgmtadvisors.com/
Article Source: ArticlesBase.com – Captives: a Better Way to Fund
Private Insurance Company
