Small Business Health Care Tax Credit

The Small Business Health Options Program (SHOP) Marketplace helps small businesses provide quality health and dental insurance to its employees with the flexibility and convenience of online application and account management. This coverage option is only available to employers with 50 or fewer full-time employees, including non-profit organizations.

Online Application Advantages

For 2015 coverage and beyond, small businesses may apply for SHOP, choose their plan(s), complete their coverage offering, manage employee participation and pay premiums online.  Their employees may also enroll online.

The convenience of the online application and account management gives employers control over the coverage they offer and how much they are willing to pay toward employee premiums. Employers also have the option to offer dependent coverage or dental coverage. Premiums may easily be paid online.

The online access also allows small businesses to enroll in a SHOP plan at any time during the month, at any time of year, with no restricted enrollment period. Employers may also manage how long their employees’ open-enrollment period is.

Some states even allow employers the choice of coverage categories (i.e. bronze or silver), and also allow employees to choose any plan within the designated category.  The federal government will assume full responsibility for running a health insurance exchange in Florida beginning in 2014. Learn more about SHOP coverage for employers.

Small Business Health Care Tax Credit

Any employer with 25 or fewer employees who has enrolled in SHOP coverage may qualify for a tax credit worth up to 50 percent of their contribution toward employees’ premium costs (35 percent for tax-exempt employers).

The Small Business Health Care Tax Credit helps small businesses and small tax-exempt organizations afford the cost of covering their employees. This credit is specifically targeted to those with low- and moderate-income workers who make an average salary of about $50,000 a year or less. The credit is designed to encourage small employers to offer health insurance coverage for the first time, or to maintain the coverage that they already have in effect. In general, the credit is available to small employers who pay at least half the cost of single coverage for their employees.

Note: To qualify for this tax exempt, employers are not required to offer coverage to part-time employees or to dependents.

To learn more about the SHOP Marketplace and the small business health care tax credit, contact your CPA for more information.

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