Small Business Health Care Credit
The IRS released a new publication today regarding the average premium for small businesses to assist them in accounting for estimated health insurance credits. It refers to Section 45R of the Internal Revenue Code that was authorized by the Patient Protection and Affordable Care Act of 2010. http://www.irs.gov/pub/irs-drop/rr-10-13.pdf. The Colorado Employee-only coverage is $4,972 and Family coverage is $11,437.
What is interesting to me as you read the Revenue Ruling is that each state has different coverage estimates. For example, Idaho individual is $4,215 family 9,365 while Massachusetts is $5,700/$14,138. That means that instead of a national uniform health program we will get different programs in each state. The slippery slope here is that those states that offer more affordable premiums may attract more businesses. Yet that is no guarantee that the quality of the care in those states will improve. Nor is it a guarantee that the states will have the funding nor that the insurance companies will have the incentive to issue policies in those states.
Okay. You say that is what we had before. Agreed. The difference is that we now have another layer of government bureaucracy on the federal level overseeing a new layer of government bureaucracy on the state level powered by new insurance company actuary-determined premiums on a state by state basis. AND if you don’t comply you will face a federal penalty. All paid for by us taxpayers.
This Revenue Ruling assists tax lawyers and accountants plan for the tax credits pursuant to The Patient Protection and Affordable Care Act for small businesses designed to increase levels of health insurance coverage. This year small businesses, defined as businesses with 25 or fewer employees and average annual wages of less than $50,000, are eligible for credits of up to 35% of non-elective contributions the businesses make on behalf of their employees for insurance premiums. Tax-exempt organizations are eligible for credits of up to 25% against payroll taxes. Any questions? Contact the Secretary of Health and Human Services.
Incidentally, Idaho has joined the lawsuit filed by 13 other states originated by Florida and joined by Colorado challenging the constitutionality of the Patient Protection and Affordable Care Act of 2010 as of March 23, 2010. The suit now includes the States of Idaho, South Carolina, Nebraska, Texas, Utah, Louisiana, Alabama, Colorado, Michigan, Pennsylvania, Washington and South Dakota. You can find the original filing in my earlier blog post http://www.garycjohnsonlaw.com/Wordpress/2010/04/florida-colorado-v-us/ .