Small Business Health Care Tax Credit for Small Employers
Friday, February 17th, 2012 | Announcements, News/Updates | No Comments
Since it is tax season, we have a friendly reminder about the Small Business Health Care Tax Credit that small employers may qualify for. This tax credit helps small businesses and organizations defray the cost of covering their employees’ health insurance premiums.
A small employer or small tax-exempt employer is eligible if:
- There are fewer than 25 full-time equivalent employees: Two half-time employees count as one full-time equivalent employee.
- Employer pays at least half of employees’ health insurance premium: A qualifying employer must cover at least 50 percent of the cost of single (not family) health care coverage for each of its workers.
- The average wage is less than $50,000 a year: A qualifying employer must pay average annual wages below $50,000. Both taxable (for profit) and tax-exempt firms qualify.
- For assistance in determining eligibility, please follow this step-by-step guide.
Benefits of the Small Business Health Care Tax Credit:
- From tax years 2010 to 2013, the maximum credit is 35 percent for small business employers and 25 percent for small tax-exempt employers such as charities.
- For small business employers who did not owe tax during the year, these employers can apply the credit to previous or future tax years. Since the amount of the health insurance premium payments are more than the total credit, eligible small businesses can still claim a business expense deduction for the premiums in excess of the credit.
- For small tax-exempt employers, the credit is refundable. Regardless of taxable income, qualified employers will receive the credit as a refund, provided that it does not exceed the income tax withholding and Medicare tax liability.
- Smaller businesses and charities will receive larger credit.
Claiming the Credit:
- The credit is claimed on the qualified employer’s annual income tax return.
- Form 8941, Credit for Small Employer Health Insurance Premiums, must be used in order to calculate the credit.
- Small business employers must include the amount as part of the general business on the income tax return.
- Tax-exempted organizations must include the amount on line 44f of Form 990-T, Exempt Organization Business Income Tax Return. Form 990-T must be filed in order to claim the credit.
For further examples of how the credit can be applied in different circumstances, please visit this link. More information is available here.
Flexible Spending Account 2013 Mandated Cap and 2012 Standard Mileage Rates
Wednesday, February 15th, 2012 | Announcements, News/Updates | No Comments
There are two announcements, one regarding health flexible spending account and one concerning standard mileage rates.
- Flexible Spending Account Capped at $2,500 in 2013:
Effective January 2013, medical Flexible Spending Account (FSA) contributions will be limited to $2,500 per year, per employee, as promulgated by the Patient Protection & Affordable Care Act (PPACA).
While there is no mandated limit at this time, many employers cap FSAs at $5,000. At the moment, over 85 percent of all medical FSA participants fund less than $2,500 yearly. In reality, the annual amount funded averages $1,300 to $1,400.
According to the Total Administrative Services Corporation’s interpretation of the statute, clients who fulfill their 2013 enrollment by selecting their medical FSA contribution within the 2012 calendar year would not be affected by the pending FSA cap until the following Plan Year. The new $2,500 provision will thus apply to any Plan Year beginning February 1, 2013 or later. With the effective date 13 months away, additional federal guidance may follow.
To stay informed about changes in government policy, please visit www.tasccapitalconnection.com.
- IRS Announces 2012 Standard Mileage Rates:
The Internal Revenue Service (IRS) issued the 2012 optional standard mileage rates used to calculate deductible costs of operating an automobile for business, medical, and moving purposes. The rate for business mileage remains at 55.5 cents per mile, but starting January 1, 2012, mileage rates associated with medical or moving purposes will decrease to 23 cents per mile.
As a note, the use of a personal automobile to solely acquire medical care may be a deductible medical expense. This mileage is acceptable as a health flexible spending account (FSA) cost, and employers may include mileage as an eligible expense under their health reimbursement arrangement.
For more information about the 2012 standard mileage rates, please visit the IRS website.
Health Net and Anthem Blue Cross Updates
Wednesday, November 16th, 2011 | Announcements, News/Updates | No Comments
Our health benefits carriers Health Net and Anthem Blue Cross have several updates for this year and the upcoming year. Health Net and Anthem Blue Cross clients, please take note.
Health Net has two updates:
- Health Net recently implemented an average premium rate reduction of 2.7% to their Small Business Group HMO plan contracts for groups with May through July 2011 renewal or effective dates. The Small Business Group will receive the adjustment on their December bill statement. This change will impact all HMO, EOA, and POS plans.Plans excluded from the adjustment are Standard HMO 20 & 30 Dual Network, Value HMO 30 & 40 Dual Network, Value HMO 50, Value EOA 50, Standard HMO 15, 25, 35, & 50, and Standard EOA 15, 25, 35, & 50.
Once again, this adjustment only applies to groups with renewal or effective dates May 1, 2011 to July 1, 2011.
- Effective January 1, 2012, Physicians Healthways will no longer be a Health Net contracted provider. Health Net immediately placed Physician’s Healthways on roll-out status to prevent any new members from being placed into this group. Current members with Physician’s Healthways will need to select another medical group.
Anthem Blue Cross has the following announcement:
Walgreens leaves the Anthem Blue Cross network on January 1, 2012. Walgreens’ sister stores (such as Duane Reade, OptionCare, and Happy Harry’s) will leave at that time as well. However, members can still receive coverage for their medicine from Walgreens and its sister stores through December 31, 2011. In most cases, the cost will not change because of Walgreens leaving the Blue Cross network.
In the case a member’s plan offers out-of-network benefits and the member uses Walgreens after December 31, 2011, the member will have to pay the full retail price as well as sending in a claim him or herself. Members are advised to transfer their prescriptions.
—–
For any questions or concerns, please contact us at (888) 400-5888. Health Net customers can contact the Health Net Member Services at the number listed on their ID card or visit www.healthnet.com. Anthem Blue Cross members can call the customer service number on their member ID card or visit www.anthem.com/ca.
CIGNA Now Ready for Instant Quote + Additional Carriers
Friday, October 14th, 2011 | Bellehaven, News/Updates | No Comments
CIGNA is now available as an instant quote for health insurance on our website! It will be on our homepage in the sidebar under “Instant Quote.”
Along with that, we now collaborate with three more insurance carriers: Guardian, Principal, and American General.
These additions mean you have even more options when it comes to coverage and benefits. Contact us if you’d like more information. We will be happy to assist you!
Our Facebook Page
Monday, September 19th, 2011 | Bellehaven | No Comments
We’ve had a Facebook page for some time but it hasn’t been active until now. Similar to this blog, our Facebook page is another fun way to get the latest updates from us.
Check out our Facebook page. You can even “like” us to stay connected with us!
First Post
Thursday, September 15th, 2011 | Uncategorized | No Comments
This blog is now active, updated with announcements and news as they become available.
Subscribe to the RSS feed to receive the latest updates on our company, our insurance carriers, and the health & life insurance industry.
