SMALL BUSINESS HEALTH INSURANCE
“The Affordable Care Act” (ACA) is expected to benefit millions of small business employers and employees by expanding coverage options, increasing purchasing power, lowering costs, and giving consumers control over their health care. In addition, the ACA will provide important tax credits for millions of small business owners. Under this plan an estimated 4 million small business owners could qualify for the tax credit in 2010, which could provide a total of $40 billion in relief for small business owners over the next 10 years.
Following is a summary of the “Small Business Health Care Affordability Tax Credits” that a apply for years 2010 thru 2014 and thereafter:
1. Small businesses with fewer than 25 full-time equivalent employees and average annual wages of less than $50,000 that purchase health insurance for employees are eligible for the tax credit. The maximum credit will be available to employers with 10 and fewer full-time equivalent emplees and average annual wages of less than $25,000. To be eligible for this credit the employer must contribute at least 50% of the total premium cost.
2. Businesses that currently receive state health care tax credits may also qualify for the federal tax credit. In addition, dental and vision care insurance qualify for these credits.
3. For years 2010 thru 2013, eligible employers will receive a small business credit for up to 35% of their contributions toward the employee’s health insurance coverage. Tax-exempt (nonprofit) small business meeting the previous requirements are eligible for a 25% tax credit of their contribution.
4. For 2014 and beyond, small employers who purchase coverage through the new Health Insurance Exchanges, can receive a tax credit for two years up to 50% of their contribution. Tax-exempt (nonprofit) small business meeting previous requirements are eligible for a 35% tax credit on their contribution.
For more information please visit www.healthcare.gov.