Extreme Savings with an HSA in Minnesota
I know all about self-employed people because I was the State Manager of Iowa and Nebraska for the National Association of the Self-Employed (NASE) between 1989 and 1993. Also the “Original Pilot Test” of Health Savings Accounts (HSA) was restricted to self-employed individuals and small employers with less than 50 full time employees between 1/1/1997 and 1/1/2004. Many times being a small employer is a family affair because you can trust members of your own family. Small employers know that the definition of an employee is the guy who doesn’t show up on the busiest day of the year. I’m a salesperson and I train salespeople to go to the extreme to make certain points so let’s try that now.
Let’s look at Nanook Roofing of Minnesota Incorporated (NRMI) and the outrageous high taxes and workers’ compensation rates of the frozen North. The owners are really good people that sent their son to the University of Iowa and he married a certified nurse anesthetist. They have 2 children and the son now runs a roofing crew in the family business and his parents pay him $90,000 a year. His wife says that he should just quit his job and take care of the children and become a house husband because she earns $157,000 a year. He probably would quit if she was an anesthesiologist and making the big bucks but she is not. Her hospital is charging $800 a month to add her family to the Hospital’s employer-based plan so the son has decided to go with his parent’s HSA Qualifying insurance plan because his parents are maximizing the HSA deposits for the employees.
The maximum HSA contribution for 2017 is $6,750 so the son saves 33% federal Income Tax, 9.85% State Income Tax and 7.65% Payroll Tax or a total of 50.5% or total savings of $3,409. The employer, his parents, save 7.65% Payroll Tax and 51.2% Workers’ Compensation or a total of 58.85% or total savings of $3,972, which is more than their son’s savings. The employee and employer save $7,381 on the HSA deposit of $6,750! In other words, they saved $631 more than the HSA deposit that the son owns in the bank. I have never seen an article in the Nation’s press that discussed an employer maximizing the employees’ HSA deposits in the last 20 years. I always told my clients to maximize the employees’ HSA and a majority of my employers did and the employees loved me for that. I have noticed that clients will do what you tell them. I always told them, it’s smart when employers and employees band together and cut the IRS out.
I tried for the 1st decade to get a newspaper to write a story about America’s best tax dodge, the tax-free HSA, but I was a complete failure. I have never once been quoted in a newspaper article. I was told by FAKE conservative David Yepsen of the Des Moines Register, “The HSA will never be put to print.” That is fancy newspaper talk about censorship. Today the tax-free HSA is the center-piece of Republican health care REFORM. I enrolled the 1st HSA/MSA the same month FOX News was born, October 1996. After 20 ½ years I have never seen a show on FOX News that was dedicated to the tax-free HSA. I did high pressure the Tampa Bay Times into printing a letter to the editor about the UNCONSTITUTIONAL ban on Short Term Medical (STM) insurance on 4/1/2017 but they insisted that I remove all reference to the tax-free HSA.
The propaganda is worse today in America than it was in NAZI Germany in 1938. I have a good friend who went to Iowa City but his wife is an anesthesiologist so he did become a house husband and a great baby sitter.