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Small Business Guide to Healthcare Reform
As a small business owner, you want to give your employees healthcare benefits, but the price tag is often too steep. How do you choose between insuring your employees and staying in the black on your accounting books? Thanks to the new healthcare reform act, you no longer have to choose.
The new healthcare reform signed into law this year will offer a number of money-saving options to small businesses looking for affordable health insurance for their employees. In addition to health insurance exchanges that provide affordable coverage to a much larger base of businesses than ever before, small businesses can also look forward to tax credits to help them offer affordable health insurance to their employees.
Learn exactly how the tax credits work so you can help your employees get the insurance coverage they need to stay healthy and productive.
When do the Tax Credits Begin?
Small businesses can already reap the benefits of the tax credits, since changes went into effect January 1, 2010. Indeed, if you have been providing affordable health insurance to your employees this year, the government wants to reward you with more money in your pocket on tax day. This is true for both companies that currently provide affordable health insurance to their employees and those that initiate coverage this year.
How Much do I Get?
In 2010, the sliding scale allows businesses to get as much as 35% of their premium costs back on their tax return. All you have to do is include the amount of the credit as part of your general business credit on your income tax return. Even better, by 2014, that amount goes up to 50%, allowing you to offer your staff affordable health insurance for a lot less money!
Small non-profit organizations also get a piece of the pie, with a tax credit worth up to 25% of the total premiums paid in the current tax year. By the year 2014, the rate will increase to 35%. What a wonderful way to reward your loyal staff with affordable health insurance and save your organization money at the same time!
Who Qualifies?
Of course, the government has rules about who will receive these credits within the parameters of the healthcare reform. To qualify, you must meet the following criteria:
• Affordable health insurance currently available to employees with the company covering at least 50% of the cost of the coverage
• A staff that is the equivalent of 25 full-time workers or less
• Workers that are earning an average wage below $50,000
The current estimate is that as many as four million small businesses across the country may be eligible for tax credits under the healthcare reform right now. For companies with 10-25 full-time workers earning an average salary between $25,000 and $50,000, these tax credits will eventually be phased out. The next few years will be the time to seize the opportunity to implement affordable health insurance for workers while receiving a cost break for your business.
Claiming the Credits
To claim the tax credits, small business owners will need to use a separate tax form, specially designed to calculate the amount of the credit you will receive. The all new Form 8941 is currently available on the IRS website for your viewing pleasure. In addition, tax-exempt organizations will need to file a revised Form 990-T, while small businesses can simply include the credit amount on their regular income tax form.
Affordable health insurance is coming – both to individuals and small businesses. If you are a small business owner, make sure you cash in on the credits available to help you shoulder the cost of providing affordable health insurance to your employees.
Visit the InsureMonkey homepage to start a health insurance quote.
