Wednesday, June 9, 2010
There’s good news in the health reform law for small businesses that pay at least half the cost of their employees’ health insurance. Beginning this year, businesses with fewer than 25 employees and with average wages under $50,000 can claim a tax credit on their income tax return. Small non-profit organizations also qualify. As an example, an employer with 10 or fewer full-time employees and with average annual wages under $25,000 (not including what the owner makes), will receive a 35% tax credit on the amount the business pays for employees’ health insurance in 2010. An online calculator to estimate savings can be found at http://www.smallbusinessmajority.org/.
This tax credit will be available to small businesses until 2014; when the credit is scheduled to increase and be available from state-based insurance exchanges which will be operating by that time.
Having health insurance makes a difference. On average, people without health insurance are less likely to get preventive care such as immunizations or mammograms, more likely to miss work, and to have worse health outcomes when they do get sick than people with insurance.
Susan K. Maloney
Managing Senior Fellow
Partnership for Prevention