Does a potential tax on health care benefits affect farmers and ranchers? You bet it does as many farmers and ranchers use what is known as a Section 105 medical reimbursement plan, which is a health care benefit of their operation. Using these plans can reduce rural health care costs by as much as one third for a married couple working on their farm or ranch operation due to tax savings.
Starting a medical reimbursement plan for a young farm family is not as easy as filling out a form and turning it over to your human resource person. There are a few hoops to jump through, the biggest is that you really need to be married if you are a sole proprietor – I’m really not making this up. And I would recommend the guidance of a CPA or accountant to navigate the rest of the payroll and reporting requirements. However, saving one-third of your medical expenses can easily make the difference today in a young farm family being able to stay in agriculture.
Instead of taxing health care benefits we need to simplify the rules so that all farm families and individuals qualify for these benefits. It is all to common to hear that one spouse has to keep their “town job” just for the health care benefits. From experience I know that having my wife not tied to a job for health benefits has not only increased our operations productivity but also makes our operation safer for myself and our family. Having an extra pair of eyes or an extra hand can definitely reduce the risk of many farm tasks such working with a cow and her newborn calf or on machinery.
Having a daughter myself with medical issues, I know that I could not have survived financially without having a medical reimbursement plan as part of our operation, as we saw some years medical expenses exceed net income. Today we are still an independent operation putting money back into our local economy which in turn provides jobs to my neighbors. So let’s use tools we already have and remove barriers so that all farms and ranches can participate thereby making our rural health care system stronger.