March 31 was the deadline for signing up for Affordable Care Act (ACA) insurance, but small businesses can take advantage of health insurance tax credits and packages all year round. Employees of small-business organizations may be able to profit from ACA, too.
No Enrollment Deadline for Employers
Although open enrollment ended on March 31, small business owners can sign up for insurance anytime. Companies with fifty employees or fewer are eligible to purchase a package from the Small Business Health Options Program (SHOP) Marketplace. All full-time employees (thirty hours or more) must be offered health insurance in order to apply.
Employees Ditch Employer Coverage
Small business employees have the option of choosing their own health coverage through the SHOP Marketplace. No company with less than fifty full-time employees, or a combination of full-time and part-time employees that has a total sum of fifty, will be charged the Employer Shared Responsibility Payment.
Small businesses with twenty-five or fewer employees who purchased insurance through the SHOP Marketplace, they may be eligible for the employer health care tax credit. In order to qualify, the company must pay fifty percent of its full-time employees’ health insurance premium costs. All employees must make an average of $50,000 or less. The smallest businesses (ten or fewer employees, making $25,000 or less on average) will receive the highest tax credit amount. According to the IRS, this credit can be used for a maximum of two consecutive years, and a business expense deduction can still be claimed since health insurance premiums are still higher than the tax credit will allow.
Tax-exempt employees who have no taxable income are eligible for a refundable credit. Small-time employers who didn’t owe taxes this year can claim the credit for previous years or on future tax documents. However, according to a Wisconsin business attorney specializing in small businesses, it’s not too late to file a 1040X form to take advantage of these monetary perks for the previous tax year.
Whether small business owners choose the SHOP Marketplace for tax savings, profit savings or to help insure employees, it’s a good idea to shop around for the best options to fit the company’s needs. And since there’s no extra charge for using a SHOP agent or broker to find the best SHOP package, companies get a better idea of what fits their health insurance objectives.