Health insurance is one of the biggest fixed costs a self-employed business owner carries, and finding a plan built for solopreneurs rather than large employer groups can be difficult. Collective has partnered with Solo Health to offer health insurance tailored specifically to solopreneurs and their immediate families, with nationwide PPO coverage and pricing that reflects your individual business.
What is Solo Health?
Solo Health lets solopreneurs sign up for high-deductible health insurance through their businesses, with nationwide PPO coverage. Premiums vary based on your individual situation, but in most cases run lower than comparable state marketplace plans. You can choose from a $2,500, $5,000, or $10,000 deductible option depending on how you want to balance your monthly premium against your out-of-pocket costs.
When you sign up for Solo Health through Collective, Collective also contributes a $100 annual credit toward your premium. You must be subscribed to Solo Health for at least four months to receive the credit, and it's applied automatically to your fourth month's premium. Terms and conditions apply, so review the details on the enrollment page before you sign up.
How to sign up for Solo Health
- Go to the Insurance tab in your Collective dashboard. From there, select Health Insurance.
- Click through to the co-branded Solo Health page (collective.solo.health). You must sign up through this specific URL to qualify for the $100 annual credit. Signing up directly through Solo Health's general site won't make you eligible for it.
- Answer a few quick questions to get an initial quote. This gives you a sense of pricing before you commit to anything.
- Complete Solo Health's fuller application if you decide to move forward. They'll ask more detailed questions about your medical history to finalize your plan.
In the rare case that Solo Health can't offer you coverage directly, they'll work with you to help find a plan that fits your needs elsewhere.
What coverage looks like
Solo Health members have access to the Multiplan PHCS network. Staying in-network gets you the highest benefits and lowest costs, so it's worth confirming a provider is in-network before your appointment.
To check whether a provider is in-network:
- Visit the Multiplan Provider Search Tool.
- Select "PHCS Practitioner & Ancillary" as your network.
- Search by name, specialty, or ZIP code.
- Filter results to show only in-network providers.
- Save the provider's details or call ahead to confirm participation.
If you see an out-of-network provider, you'll need to go through a pre-authorization process first to negotiate costs. Solo Health's claims administrator, Vault Health Admin, can help facilitate fair pricing with that provider.
Tax benefits for S Corp members
If you've made the S Corp election, signing up for Solo Health through Collective comes with a payroll setup step that unlocks a meaningful tax benefit. Here's why it matters: as an S Corp owner, you're both the owner of the business and an employee of it, and healthcare premiums get favorable tax treatment only when they're routed correctly through payroll.
When you sign up through Collective, the Collective team automatically helps set up your healthcare premium correctly on your payroll (this is also available for other health insurance coverage on request). Here's what that setup does on each side:
- On the business side: Your full healthcare premium is recorded as a company benefit and deducted as a business expense. Pay your premium with your business credit card so the transaction flows through your books correctly.
- On the employee side: Receiving healthcare as a company benefit technically counts as additional income to you as an employee. The Self-Employed Healthcare Deduction generally lets you deduct that value from your income taxes, so you typically don't owe income tax on the healthcare premium your business provided.
You can only claim this deduction when your premium is set up on payroll, your profit meets or exceeds your premium amount, and you're not eligible for other employer-sponsored coverage. That's why getting this set up correctly from day one matters, and it's exactly what Collective helps you do.
A worked example
Numbers below are illustrative only. Your actual results will depend on your income, compensation, and elections.
Say your S Corp shows $100,000 in profit, you pay yourself a $50,000 salary plus $20,000 in reasonable compensation adjustments, and your healthcare premium is $10,000 for the year.
| Amount | |
|---|---|
| Starting profit | $100,000 |
| Officer compensation deduction (salary + healthcare) | -$60,000 |
| Remaining profit eligible for shareholder distribution | $40,000 |
Your salary and healthcare premium combine into one Officer Compensation deduction on the business return. The remaining profit can be distributed as a shareholder distribution, which is generally exempt from the 15.3% self-employment tax.
On your W-2, the IRS requires a specific split:
| Amount | |
|---|---|
| Federal taxable wages (salary + healthcare) | $60,000 |
| Social Security and Medicare wages (salary only) | $50,000 |
The healthcare premium is added to your federal taxable wages but excluded from the wages subject to Social Security and Medicare tax, so you and your S Corp generally only pay the 15.3% tax on your $50,000 base salary rather than the full $60,000.
On your personal return, your total income starts as your $60,000 in cash salary plus your $40,000 in K-1 distribution income, for $100,000. The Self-Employed Health Insurance Deduction then lets you deduct your $10,000 premium (as long as it's less than your Medicare wages), bringing your adjusted gross income down to $90,000.
In this scenario, the healthcare premium could effectively become income tax free while also staying out of the base subject to self-employment tax. Actual savings vary by individual situation, and this example isn't a guarantee of what you'll see on your own return.
How Collective keeps your payroll accurate
Once you're enrolled, Collective sets up your monthly healthcare premium as a deduction at the company level and as additional income at the employee level on your payroll, adjusting the amount based on your paycheck frequency.
Because payroll cycles don't always line up perfectly with premium billing (for example, if you start payroll partway through the year or skip a cycle), the amount deducted through payroll may not exactly match the total premium you paid to Solo Health by year end. In early December, the Collective team reconciles the expected premium against what you've actually paid and works with you to true it up or down before year end, so you're prepared heading into tax season.
Tax benefits for LLC members
If you haven't made the S Corp election, healthcare premiums paid through your LLC aren't deducted as a business expense. Instead, they're deducted on your personal tax return through the Self-Employed Healthcare Deduction. For example, if you pay yourself $100,000 in income from your LLC and pay $10,000 in healthcare premiums, you could deduct that $10,000 from your income so you're only taxed on $90,000 of adjusted gross income.
Two restrictions apply to this deduction:
- The net profit rule: Your deduction can't exceed your LLC's net profit for the year. If your LLC's net profit was $5,000 but your insurance cost $8,000, your deduction is capped at $5,000.
- The spouse and employer rule: You (and your spouse, if applicable) must not have access to employer-sponsored coverage. If you or your spouse are eligible for a subsidized plan through a W-2 employer, you lose this deduction entirely, even if you choose not to enroll in that plan.
When you sign up for Solo Health through Collective and pay with your business credit card, the Collective team makes sure those transactions flow through your accounting correctly and onto your individual tax return.
Filing a claim or asking coverage questions
For claims: Submit claims through your Solo Health account. They're routed to Vault Health Admin, Solo Health's claims administrator, for evaluation and processing. Some high-cost procedures or diagnostic tests require pre-authorization first.
For coverage-specific questions: Reach out through your Solo Health account for anything specific to your coverage or benefits. Due to regulations, Collective can only speak to your basic coverage details and premium amounts, not the specifics of your plan or claims.
For payroll-specific questions: The Collective team can help with anything related to how your healthcare premium is deducted from your payroll. Reach out to your Collective team directly.
If you leave Collective or dissolve your LLC
Your Solo Health coverage continues even if you leave Collective, though you'll no longer be eligible for the $100 annual credit going forward.
To maintain a Solo Health plan, you need to remain an independent, self-employed business owner with your own federal Tax ID, whether that's through an LLC, S Corp, or another business structure. If you dissolve your LLC without another qualifying structure in place, your eligibility may be affected. See Solo Health's FAQ for more detail.
Common misconceptions
"Signing up for Solo Health automatically gets me the tax benefits." Not quite. For S Corp members, the tax benefit depends on your premium being set up correctly on payroll, not just on having the coverage. Signing up through Collective is what triggers that setup.
"I can sign up for Solo Health anywhere and still get the $100 credit." The credit is only available when you enroll through the co-branded page linked from your Collective dashboard (collective.solo.health).
"My LLC gets the same deduction structure as an S Corp." LLC members deduct healthcare premiums on their personal return rather than as a business expense, and the eligibility rules are different. See the tier-specific sections above for the details that apply to you.
Next steps
To get started, head to the Insurance tab in your Collective dashboard and select Health Insurance. If you have questions specific to your business or how your premium affects your payroll or taxes, reach out to your Collective team. They're here to help.
The information contained in this article is provided for informational purposes only and should not be construed as legal, financial, or tax advice. It is not intended to be a substitute for obtaining legal, accounting, or other financial advice from an appropriate and/or licensed adviser, or for the purpose of avoiding U.S. Federal, state or local tax payments and penalties.