Many of you are starting to receive information regarding the small business tax credit for health insurance benefits. Those employers with less than 25 full time equivalent employees whose annual wage is less than $50,000 may receive a tax credit equal to a percentage of employer contributions that must be at least 50% of the premium for the qualified health plan. This Federal employer contribution is consistent with all insurance carrier minimum employer contributions towards group health care coverage.
The good news: The tax credit may allow employers to stay in the game and continue providing health insurance. May offset any health insurance increase for 2010 and could help increase the employer contribution.
The bad news: Future health care legislation which eliminates annual caps, increases preventive care benefits, and changes medical loss ratios will no doubt increase premium in the short term.
We will continue to educate you on the carrier definition of a full time equivalent as we receive guidance from the insurance underwriters.