Finally – one part of the healthcare reform law appears to be working smoothly.
Many small businesses seem to be taking advantage of the tax credits offered to small employers that provide their workers with health insurance. The credits were part of the healthcare reform law.
The percentage of companies employing between three and nine workers that offer health insurance has increased to 59% (up 13% from last year), according to a report issued by Bernstein Research, which used research from the Kaiser Family Foundation.
Researchers attribute this climb in small employer coverage to the reform tax credit that covers as much as 35% of a small employer’s insurance premiums.
To receive the full credit:
- Companies must employ 10 or fewer full-time employees (or the equivalent of 10 full-time workers), and
- The average annual wages of those employees must be less than $25,000.
The credit is offered on a sliding scale: the bigger the company, the smaller the credit it receives. It phases out completely for companies with 25 or more employees receiving an average annual wage of $50,000 or more.
Some businesses can double dip
The Internal Revenue Service is now saying that businesses may be able to collect the federal credit, as well as a state tax credit — if your state offers such a credit and your company meets both of the bulleted requirements above.
Currently, about 20 states offer tax credits or subsidies to small businesses that offer health insurance to their workers.