Generally, corporations receive more tax advantages from employee benefits than do sole-proprietorships or partnerships. Businesspersons using the cash method of accounting can deduct insurance premiums only for the year for which the insurance is in effect. Prepaid insurance premiums cannot be deducted. Many employees may not be able to afford comprehensive health insurance unless the employer provides it as a benefit. Group health insurance, even for small groups, is often less expensive than individual health insurance.
Employers can deduct group hospitalization and medical insurance premiums paid on employee policies.
A group health plan provides medical care to your employees, former employees, or their families. Qualified beneficiaries are the employee, if he is terminated or his working hours have been reduced, or if the employer claims bankruptcy, and an employee's spouse or dependent children, if covered under the plan. Technically they are the employees of a corporation and are not self-employed. Health Insurance Group health insurance is usually less expensive than individual health insurance. Premiums for employees, including family members, are tax deductible business expenses.