A tax credit for small business owners who provide health insurance coverage for their employees may help cover the costs of premiums that are associated with healthcare plans. Many small business owners struggle to cover these premium costs when providing a health insurance option for their workers, so in order to make premium payments more affordable, this small business health insurance tax credit has been offered.
According to the IRS website, “small businesses who wish to claim a tax credit for health insurance benefits that are offered to employees must cover at least 50% of the costs associated with providing health care coverage, an employer must have less than the equivalent of 25 full-time workers, the average annual salary for employees must be below $50,000, and this credit can apply to both for-profit and nonprofit businesses.”
Health insurance coverage is something that has been a highly discussed topic over the past months in our nation, as the passage of legislation to overhaul health care in our country was a debated subject that is still being challenged. Yet, few will deny the fact that the costs of healthcare are rising and, for an employee who may be uninsured, paying medical costs out of pocket is simply impossible.
Workers who are uninsured and are suddenly hit with an unforeseen illness or injury will find that the costs of medical treatment are well beyond their means to pay, which can be difficult for a worker whose salary does not afford them the funding to meet high medical costs. There have been, in extreme cases, workers who have been forced to file bankruptcy due to medical costs or these individuals have suffered in other areas of their financial lives while trying to repay the costs associated with medical care.
It’s hoped that this tax credit will provide the opportunity for more businesses to provide health insurance coverage for their workers and, at the present time, be able to meet premium payments on employees who are insured. Health insurance can be more affordable when it comes from an employer as employer group health insurance plans spread out the risk an insurer takes when offering a policy. Obviously, if a healthcare insurer collects more in premiums from a larger number of individuals than they pay out on a policy, health care coverage costs may be lower.
New health care legislation and the small business health insurance tax credit are hoped to prompt more business owners to set in place affordable health insurance options for their employees so that in the case where an employee needs medical treatment they will not be financially burdened or pushed to the point of bankruptcy to simply meet the costs of medical care.