Ask HN: How do Independent Contractors handle "company benefits" | Hacker News Reader

Ask HN: How do Independent Contractors handle "company benefits"

2 pointsbluesmoon4 comments

This probably applies to both Independent Contractors as well as founders, essentially anyone who isn't tied to a large company. Most large companies offer benefits like Health insurance, 401-K matching, Social Security deductions, etc., all of which are done pre-tax. I'm guessing that most independent contractors need to take care of these things themselves. If you do, would you mind sharing your experiences?

In particular, which of these do you consider necessary? Does what you consider necessary change with age? How do you go about making the necessary investments? How does it show up when you file your tax returns?

My interest is US based, but I'd love to hear about how people in other countries handle the same, so in your response, please state which country this applies to.

Thanks.

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If I where under 32, healthy, and single, I would go with a Major Medical plan where anything under 5K is out of pocket. I would put 5K away in a savings account and then be done with it. In the long run it would be cheaper.

Being that I am not and that I have a family I must carry a plan. After I left my last position I carried COBRA until it ran out. It was the best plan that we have ever had and we kept it until we cold no longer. After that, we picked up a policy via our accounting firm. Our Accountant's firm manages a lot of small business, consultancies and start-ups and acts like the accounting department for each of them. It is like timeshare accounting (and HR). Anyway they can negotiate group policies because they represent a larger pool of people which works out well. I always tell people a good accountant (and lawyer) are worth every penny, it is the people who most believe that they can't afford an accountant that usually can't afford to not have a good accountant.

and they are? ...

Sorry I am in FL so I did not mention their name, figuring that most on here are interested in CA and NYC, but the name of the Accountant is Swart Baumruk & Company and they are in the greater Orlando area.

The cost for health insurance varies a great deal from state to state. I don't want to sound like my dad, but anyone who thinks they don't need heath insurance is kidding themselves. If you do something as minor as break a leg you can go through $20k pretty quickly (i've had a friend or two who did that). Too many twentysomethings think that they won't hit a major health issue, and for the most part they're correct but there are exceptions that happen every minute of every day.

For advice on other issues like setting up your won payroll or doing a 401-k plan talk to your accountant for advice.

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