WASHINGTON — A large majority of Minnesota’s small businesses will receive health-care tax credits this year under the recently passed health-care reform law, according to a report released today.
Nearly 78,000 Minnesota small businesses (about 84 percent) are expected to qualify for health-care tax credits this year, according to the report from Families USA, a health-care advocacy group, and Small Business Majority, a small business advocacy group.
“There’s been a lot of speculation about how many small businesses will qualify for tax credits, and this report clears up a lot of those questions,” said John Arensmeyer, founder and CEO of Small Business Majority. “We now have real numbers that show the vast majority of small businesses in Minnesota will qualify for tax credits under the new law. That’s huge.”
Starting in 2014, the health-care reform law requires any employer with more than 50 employees to provide health insurance for its employees. Federal minimum standards are higher than many of the plans currently offered, and prohibits some current practices like higher premiums for patients with pre-existing conditions.
The tax credits are aimed at offsetting additional costs for these businesses to provide health care to their employees.
Minnesota’s statistics are similar to the national average, as about 84 percent of small businesses nationally (4 million in all) will receive the tax credits. Small businesses are defined as having fewer than 25 employees.
Of the Minnesota businesses that will receive credits, about 22,000 are expected to qualify for the maximum credit of 35 percent of the employer’s costs for employee coverage. The businesses that qualify for maximum credits employ 10 or fewer employees who earn an average wage of less than $25,000.
The provision also allows an employer to count two part time workers as one full-time worker so they can secure health care credits for these employees as well.
Reform supporters say that the business tax credits will help make coverage “affordable and accessible” for America’s small businesses.
“Many small businesses — like the local diner, the hardware store down the street, or the neighborhood repair shop — face special challenges in providing health coverage for their small number of employees,” said Ron Pollack, executive director of Families USA. “They will now receive substantial help.”
Lauren Knobbe is an intern in MinnPost’s D.C. Bureau.
Nice article, and I agree that it is can be difficult to access the health tax credit.
But, I would like to point out an additional way to access the health tax credit: combining a limited medical benefits program with a high deductible HMO.
The limited medical benefits program generally won’t qualify for the health tax credit, but wrapped with a high deductible HMO, the package may qualify and be affordable.
I go through a general example here: http://www.franchise-info.ca/supply_chain/2010/07/Small-business-tax-credits.html
Interesting article. It’s good to see small business get a credit for their health-care taxes. It is difficult just to start your own business. Franchise Expo assists you start your own business step by step. You can check them out here: http://www.franchiseexpo.com/