If you are a small business owner, have you considered providing health insurance for your employees?
The Affordable Care Act (ACA) makes health insurance mandatory for most Americans in 2014, and the deadline for individuals to enroll in personal coverage — March 31, 2014 — is approaching quickly. Your employees may be scrambling right about now to get coverage.
If you are trying to decide whether or not to provide health insurance for your employees, here are two good reasons to do so:
- Offering health insurance will help you attract and retain employee talent.
- Offering health insurance may entitle your business to a tax credit.
How the Small Business Tax Credit Works
- You must employ fewer than 25 full-time equivalent (FTE) employees. For example, two half-time workers count as one FTE. If you employ 20 half time workers, your FTE is 10.
- You also must pay at least 50% of the cost of single (not family) health insurance premiums for each of your employees. Paying only your own health insurance premiums does not make you eligible for the credit. You must pay for your employees’ coverage!
- The average wage for your employees must be less than $50,000 per year. Figure your average wage by dividing the total annual wages you pay by the number of FTEs you employ. For example, if your total wages are $250,000 and you employ 10 FTEs, then your average annual wage is $25,000.
- The credit is calculated on a sliding scale, based on the size of your business. The smaller the business (either in FTEs or wages), the bigger the credit. The credit in 2014 could be as much as 50% of premiums paid (35% for tax-exempt employers).
- If the amount of your credit exceeds the amount of taxes you owe, you can carry it back one year, or forward for 20 years.
- You must purchase your group insurance through the Small Business Health Options Program (SHOP) Marketplace to get the tax credit. For 2014 plans, you must apply via paper application on SHOP. Click here to access the SHOP application.
Get Help from a Broker
There are numerous reasons you should consider calling a broker for help with insurance for your small business:
- Selecting the right plan is a complex decision, with many factors to consider.
- Enrolling in a group plan via paper application on SHOP is cumbersome. A broker can help.
- You may want to provide coverage for your employees regardless of your eligibility for a tax credit. If this is true, then you should explore plans both inside and outside of the SHOP exchange.
- You pay nothing extra for using the services of a broker, yet you get help with enrollment, administration, claims, etc. for all of your employees, for the life of your policy.
- Your employees must have coverage by March 31 so don’t delay!
Give our office a call 703-707-8270 to learn more about your options for group coverage.
Please be patient as we manage a high volume of calls and emails.