Blurred Lines - Health Needs Weave Family and Business Together
Featured in the November issue of our magazine.
Getting sick or injured isn’t fun. But
health issues when you are self-employed
and farm full-time can create
more than just a day out of the office. It
may permanently affect your business.
That fear is not lost on producers
nationwide. Several survey and research
projects confirm the tight relationship
between health issues, farm families
and the farm business.
A USDA-funded research study of farmers
and ranchers last year, led by Shoshanah
Inwood, Ph.D., Ohio State University assistant
professor and HIREDnAg project director
(see story page 22), confirms the farm
enterprise and farm family are intertwined.
Half noted no one could run the farm
if there was major illness or injury.
About 40% surveyed
said they or a family member
have had health problems
affect their ability to farm.
In an Agricultural Resource Management
Survey (ARMS) in 2015, researchers identified
illness or injury as a major farm risk.
At the time, 9.1 % of the U.S.
population had no health
insurance compared to 10.7 %
of farm household members.
The majority of farm
health insurance through
operator or spouse
employment off the farm.
In the ARMS survey, farmers were slightly
more likely than the general population
to purchase health insurance directly
from a company and less likely to receive
insurance from a government program,
such as Medicare or Medicaid.
Family living expenses
are not tax deductible
for a farm business,
but must be budgeted to sustain farm family
living expenses, according to a report from
Brandy Krapf, Dwight Raab and Bradley
Zwilling with the Illinois Farm Business
Farm Management (FBFM) Association.
Non-deductible expenses must come from
the farm and can be supplemented by
non-farm earnings. Family living expenses
include medical expenses like out-ofpocket
costs and premiums for purchased
health, dental or vision insurance.
Data from a group of Illinois FBFM sole
proprietor members with family living expenses
records shows total family living expenses,
including medical, increased from 2007 to
2016 at just over 20 percent. Net family
living expense change was relatively flat for
farmers in the 500- to 999-tillable operator
acres group and the more than 1,000 tillable
operator acre group, as they increased net
non-farm income. The under 500 tillable
operator acre group saw an 18 percent
increase in net family living expenses.
Farmers who cover their own
health insurance costs must
address the finance and tax
issues associated with them.
According to Marc Lovell with the University
of Illinois Tax School and Department of
Agricultural and Consumer Economics,
maximizing tax savings from health insurance
premiums paid has become increasingly
important and complex. To be accurate and
make the most of the situation, farmers should
consult tax advisers about reducing costs
through tax savings and proactive planning.
Medical expenses were higher in 2017 compared
to 2016. In 2017, medical expenses averaged
$12,007 in the Illinois Farm Business Farm
Management report. Medical expenses include
out-of-pocket costs for health insurance along with
doctor and hospital expenses.