40 Square Cooperative Solutions, Minnesota’s independent agricultural health plan cooperative, is reminding agribusinesses that they too can enjoy the option of self-funded health insurance for their families and business employees. But the health plan enrollment deadline is quickly coming up and will close on Wednesday, December 19, 2018.
According to Minnesota state law, in order to become a member of the 40 Square health plan cooperative a farmer/employer must file either Form 1065 or Schedule F with their income tax return. In addition, entities which provide direct services to production agriculture in Minnesota are also eligible for membership. The 40 Square Board of Directors has defined this as, “Small businesses that predominately derive their income from services provided to production agriculture in Minnesota, as allowed by Minnesota State Statute.” This definition also includes farm corporations which file a Form 1120, such as S Corporations, C Corporations and LLCs.
The key factor is that the business must derive a minimum of 70% of their income from providing services to production agriculture.
Small businesses and professions with less than 50 employees which may qualify for 40 Square Cooperative Solutions, can include:
- Livestock hauling
- Grain and feed trucking
- Drain tiling
- Hoof trimmers
- Soil testers
- Grain elevators
- Crop consultants
- Agricultural implement dealers
- Large animal veterinarians
- Milk haulers
- Custom harvesters
- Mechanics – ag machinery/equipment, large trucks, etc.
- Manure haulers
- Seed dealers
This is not an exhaustive list and interested businesses should contact 40 Square to learn if they qualify for membership.
Char Vrieze, Executive Director of 40 Square, encourages small ag businesses to take a look at 40 Square’s plan options. “In order to strengthen and help preserve the proud tradition of farming and agribusiness in Minnesota, we are striving to provide health plan solutions that give those in the ag community more health plan choices and a larger provider network in their local area,” said Vrieze.
Structure of Cooperative and Health Plan
The 40 Square co-op is governed by a board of directors, elected by its members/patrons. Fifty-one percent of governance is members and patrons, 49 percent is investment partners.
Participant members pay into the co-op to self-fund the health plan. Those premium dollars are then placed into a Trust, only to be used for health plan expenses. All health plan participants have 100 percent ownership interest in the Trust
Health Plan Details
In 2019 40 Square will offer seven health plans, including health savings account (HSA) eligible plans. A new high deductible plan has been added that will have the lowest monthly premium compared to other 40 Square plans, giving the opportunity to save on monthly expenses. Two other 40 Square plans will also have individual and family out-of-pocket limits reduced for 2019.
Similar to traditional individual health insurance, 40 Square’s self-funded plans have an annual deductible, coinsurance and copays. The amount of coverage received depends on the plan selected. Additional benefits being offered include vision, dental and life. Other products to enhance the health plan include hearing benefits, free telemedicine doctor visits, care navigators that help explain tests, claims or billing, and a partnership with TASC’s AgriPlan/BizPlan products, which offers the ability to declare medical expenses as a business expense on taxes.
To become a member of 40 Square, farm families and agribusinesses must meet certain criteria. They must:
- Actively work in production agriculture in Minnesota
- File either Form 1065 or Schedule F with their income tax return or provide direct services to production agriculture in Minnesota. This includes farm corporations and businesses who predominantly receive their income from providing their services to production agriculture
- Purchase Voting Stock in an amount of $100 (one-time, only for the farm/business/employer)
- Purchase Common Stock of $1,000 over the first year (one-time, only for the farm/business/employer)
- Have a minimum of one “Common Law” employee. (In general, someone who you provide a W-2, does not have to be a full-time employee; for example, it may be a spouse who does the farm books.)
Membership can be extended to include farm corporations as well as agricultural-related businesses who receive at least 70 percent their income from providing services to production agriculture. All members must commit to a three-year term with a risk of forfeiting a portion of their investment if they leave the co-op before their term has expired.
The open enrollment deadline is Dec. 19, so interested individuals should contact their local health insurance agent or visit www.40Square.coop to learn more. Contact info@40square or 844-205-9579 to get more information.