There are Tax Credits for businesses who cover more than 50% of the employee’s portion of health insurance. If the average wage of the non-owner employees is below $50,000 and for fewer than 25 employees, there is a potential of getting this tax credit. Please read the IRS link below for more details. There is also an effective calculator from Aetna that may help you decide whether this option may fit.
There are pros and cons to this. The big pro is that you’d get a tax credit up to 50% for 2014 and beyond, and for 2010 to 2013 tax years it would be up to 35%. Another pro is that in 2014, employees can purchase across all companies that have plans on the SHOP exchange in the Metal Level that their employer chooses, or choose from the plans available within a single company (similar to the way it’s done now).
The cons are that for 2014 and beyond, you’d need to purchase from the SHOP Exchange in your area (Maryland Health Connection, DC Health Link, or Healthcare.Gov). These are not yet open and will be for a March 1 initial effective date. At your next renewal, you could go onto the “SHOP Exchange” and set this up. There are significantly fewer plans on the SHOP, and you are only eligible to receive the credit for 2 years.
PLEASE CONSULT YOUR TAX ADVISOR FOR MORE DETAILS ON THE CREDIT. THIS IS NOT TAX ADVICE.
Still have questions regarding the new health care laws? Contact McFarlin today!