Health Care Reform Provides Tax Credits for Small Businesses NOWAdded by Hawley Troxell in Articles & Publications, Health Law on April 1, 2010
Unless you have been living under a rock for the last 18 months, you are undoubtedly aware that health care reform is now reality. And even if you have somehow spent the last 18 months sub-terra, you probably still managed to hear some faint echoes regarding the vigorous debate surrounding the historic legislation and its eventual enactment. In just a little over a month since its enactment, there has been a flood of publication attempting to explain what the legislation means now, in 4 years, and even in 10 years, for the uninsured, insurers, employers, and medicare participants.
I won’t try to summarize here what exactly the health care reform legislation means. The truth is, no one will really know until the federal government publishes its regulations and guidance and state governments have begun to implement the SHOP (Small Business Health Options Programs) exchanges. Nor will I try to warn about the 40% excise tax that will be imposed on high-cost employer provided policies starting in 2018. Most of our clients are more worried about 2010 than 2018.
For tax year 2010, small businesses that have 10 or fewer full-time employees that earn less than $25,000 on average can get a tax credit of 35% of health insurance costs. Small businesses with 25 or fewer full-time employees earning an average of $50,000 or less qualify for a 25% tax credit. These tax credits will be in place for the next four years (until the SHOP exchanges are set up), although there is a phasing out provision allowing for the tax credits to remain in place for the first two years a company buys insurance through its state exchange.
If you have questions about these or other legal issues, please contact a member of our Health Law group or 208.344.6000.
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