What else is new under PPACA?
A new, small-group tax credit can help some employers save up to 35 percent on health, dental and vision insurance premiums if:
- The employer has fewer than 25 full-time employees.
- Employees have average annual wages of less than $50,000.
- The employer pays at least 50 percent of the employee-only premium.
There’s a special calculation for part-time employees used to determine if the employer meets the group size requirement. Because the eligibility rules are based on the number of full-time equivalent employees (FTEs), not the number of employees, businesses that use part-time help may qualify even if they employ more than 25 individuals.
Employers with 10 or fewer FTE employees that pay annual average wages of $25,000 or less can qualify for the maximum credit. Employers with 10 to 25 FTE employees that pay annual wages of $50,000 or less can qualify for a smaller tax credit. An expert can help you get the calculations right.
How can an employer know if the company is eligible for the tax credit?
First, all employers should explore whether they are eligible. Because of the potential for savings, it’s worth talking to your accountant or other tax professional. There are some special rules for family members who work for the business, seasonal workers and others. That’s why it’s key to get an expert involved.
Where can an employer get more information about the credit?
The best source of information is the Internal Revenue Service. In mid-May, the IRS released guidelines for small commercial and nonprofit employers that want to take advantage of a new health insurance tax break.
The small employer health insurance tax credit guidelines, given in IRS Notice 2010-44, include examples that can help employers and tax professionals determine whether the employers are eligible for the tax break and exactly how much of the new federal health insurance tax credit they can claim.
What are the next steps in health care reform?
In the coming months, the U.S. Department of Health and Human Services will issue many new rules and regulations that clarify how the new health reform law will work and its new requirements. This is an unprecedented time of change in health care, and keeping the lines of communication open is crucial.
You’ll want to work with your insurer to stay on top of updates to business policies, benefit administration and other critical news.
David Crosby is regional president of HealthAmerica. Reach him at [email protected].
