Cami
Boxer Insane
You know when something happens or you are presented with having to make a choice/decision and you get an icky feeling? Almost like a gut instinct. I am going through something right now that just doesn't seem quite right to me and before I make a decision I am trying to get some opinions.
I would love to give you the short version but it is sort of confusing.
My DH owns his own company (s. corp). He is the sole employee of the company. He gets a regular W2 like any other employee would.
He works AT another company who "hires" his company. DH shows up to work and at the end of the week this company pays HIS company.
Owner of the company my DH works AT also owns another company (unrelated industry). We'll call this owner "Bob".
Bob's other company offer health insurance, etc....benefits to his employees. Bob wants to increase my DH's "pay" (money he pays DH's company) but the funds are not there at this time. He decided that he would offer additional compensation in the form of benefits. We were blown away by his very generous offer but it isn't every day that someone wants to GIVE us something so we had to wrap our brains around it for a bit. We currently pay $700/month for our own health insurance so this would be like getting an $8400/year raise. Not chump change for sure. :D
Here is where it gets dicey and what gives me the "icky" feeling.
Not understanding how this was going to work Bob said he was going to add DH to his original company as an employee. Pay him $1.00/year. He would be an official employee. Get a W2 for that one dollar yearly. Bob (his company) would pay for the entire cost of coverage for employee + spouse. Health insurance, dental, vision and life. He say's that under his company's group plan (better rates) he could cover us for $300 - $500/month. The costs are a full deduction for his company plus he would get some sort of tax credit as well. He said and I quote..."It is his company, his money and he can do what he wants with it."
Okay. I understand THAT however it just SCREAMS insurance fraud TO ME.
Now.....DH has in fact done work for Bob AT the other company but not been directly compensated for it, rather paid via the company Bob owns that hires DH's company.
I've tried to analyze this till I am blue in the face.
While "technically" he can add DH to his employee roster by paying him $1.00/year, generate a legit W2 he still does not actually WORK at the company. There HAS TO BE some sort of criteria (one would think) BY the insurance company that mandates what an actual eligible employee is. Bob does offer insurance to part-time employees but they actually work.
I am of the mindset that even if someone/company has done this sort of thing in the past and "got away with it" it still doesn't make it "legal".
God forbid we go to make a claim for some major medical crisis and be denied coverage due to DH not meeting the criteria of an eligible employee. Bob also points out to me (when I keep questioning him) that Steve Jobs paid himself only $1.00 year and one might assume he had health benefits! I get that but one can also assume he actually WORKED.
Friends/family say that Bob didn't get where he is today (very successful) by doing things illegal. He wouldn't EVER risk the health coverage for his 50 employees just to fraud the insurance company to get insurance for my DH. I don't know what to do.
Usually when it sounds too good to be true it usually is. When your gut tells you something just isn't right and when you get an icky feeling you should usually listen to it! Am I just being a nervous Nellie here and more so perhaps just still in shock that someone wants to do this for us? DH just thinks this is wonderful and isn't really thinking about the potential risks that I keep wondering about.
I have an application sitting in front of me to start the benefits but I can't fill a good portion of it in since it asks about HOW "employee" is paid (hourly, salary, hire date, hours worked, etc...). I've been putting this off since January....7 months now!
Thoughts? Opinions?
I would love to give you the short version but it is sort of confusing.
My DH owns his own company (s. corp). He is the sole employee of the company. He gets a regular W2 like any other employee would.
He works AT another company who "hires" his company. DH shows up to work and at the end of the week this company pays HIS company.
Owner of the company my DH works AT also owns another company (unrelated industry). We'll call this owner "Bob".
Bob's other company offer health insurance, etc....benefits to his employees. Bob wants to increase my DH's "pay" (money he pays DH's company) but the funds are not there at this time. He decided that he would offer additional compensation in the form of benefits. We were blown away by his very generous offer but it isn't every day that someone wants to GIVE us something so we had to wrap our brains around it for a bit. We currently pay $700/month for our own health insurance so this would be like getting an $8400/year raise. Not chump change for sure. :D
Here is where it gets dicey and what gives me the "icky" feeling.
Not understanding how this was going to work Bob said he was going to add DH to his original company as an employee. Pay him $1.00/year. He would be an official employee. Get a W2 for that one dollar yearly. Bob (his company) would pay for the entire cost of coverage for employee + spouse. Health insurance, dental, vision and life. He say's that under his company's group plan (better rates) he could cover us for $300 - $500/month. The costs are a full deduction for his company plus he would get some sort of tax credit as well. He said and I quote..."It is his company, his money and he can do what he wants with it."
Okay. I understand THAT however it just SCREAMS insurance fraud TO ME.
Now.....DH has in fact done work for Bob AT the other company but not been directly compensated for it, rather paid via the company Bob owns that hires DH's company.
I've tried to analyze this till I am blue in the face.
While "technically" he can add DH to his employee roster by paying him $1.00/year, generate a legit W2 he still does not actually WORK at the company. There HAS TO BE some sort of criteria (one would think) BY the insurance company that mandates what an actual eligible employee is. Bob does offer insurance to part-time employees but they actually work.
I am of the mindset that even if someone/company has done this sort of thing in the past and "got away with it" it still doesn't make it "legal".
God forbid we go to make a claim for some major medical crisis and be denied coverage due to DH not meeting the criteria of an eligible employee. Bob also points out to me (when I keep questioning him) that Steve Jobs paid himself only $1.00 year and one might assume he had health benefits! I get that but one can also assume he actually WORKED.
Friends/family say that Bob didn't get where he is today (very successful) by doing things illegal. He wouldn't EVER risk the health coverage for his 50 employees just to fraud the insurance company to get insurance for my DH. I don't know what to do.
Usually when it sounds too good to be true it usually is. When your gut tells you something just isn't right and when you get an icky feeling you should usually listen to it! Am I just being a nervous Nellie here and more so perhaps just still in shock that someone wants to do this for us? DH just thinks this is wonderful and isn't really thinking about the potential risks that I keep wondering about.
I have an application sitting in front of me to start the benefits but I can't fill a good portion of it in since it asks about HOW "employee" is paid (hourly, salary, hire date, hours worked, etc...). I've been putting this off since January....7 months now!
Thoughts? Opinions?
