:: Healthcare Reform ::

Healthcare Reform

With the passing of the Patient Protection and Affordable Care Act (PPACA) and the Health Care and Education Reconciliation Act of 2010, Health Care Reform remains at the center of the U.S. political debate.

As this landmark legislation continues to evolve and regulations unfold, GBAC is working with our clients to help interpret, analyze, manage and communicate throughout the process.

With its multifaceted implementation schedule, GBAC is here to provide employers with direction and answers on immediate concerns as well as the longer term considerations for complying with reform and appropriately revising their health care benefits strategy.

Helping you keep track of Healthcare Reform is one of our main goals, check back frequently as we will work to help you understand the strategic, financial, and operational impact for today...and in the years to come.

Interactive Timeline

Health Care Reform News Alerts

Small Business Health Care Tax Credit for Small Employers

The small business health care tax credit helps small businesses and small tax-exempt organizations afford the cost of covering their employees.

Received a Postcard from the IRS?

Millions of small employers received postcards from the IRS beginning in April that alerted them to the new small business health care tax credit and encouraged them to check their eligibility. Even if you didn't receive a postcard, your business still may be eligible. Read more about this effort.

Eligibility Rules

Providing health care coverage. A qualifying employer must cover at least 50 percent of the cost of health care coverage for some of its workers based on the single rate.
Firm size. A qualifying employer must have less than the equivalent of 25 full-time workers (for example, an employer with fewer than 50 half-time workers may be eligible).
Average annual wage. A qualifying employer must pay average annual wages below $50,000.
Both taxable (for profit) and tax-exempt firms qualify.

Amount of Credit

Maximum Amount. The credit is worth up to 35 percent of a small business' premium costs in 2010 (25% for tax-exempt employers). On Jan. 1, 2014, this rate increases to 50 percent (35 percent for tax-exempt employers).
Phase-out. The credit phases out gradually for firms with average wages between $25,000 and $50,000 and for firms with the equivalent of between 10 and 25 full-time workers.

Three Simple Steps for Employers to Qualify

To determine if your small business or tax exempt organization qualifies for the small business health care tax credit, follow the three simple steps on the IRS fact sheet.

Examples

Scenarios illustrate how the credit applies to employers in different circumstances.

Claiming the Credit

Small employers, whether businesses or tax-exempt organizations, will use new Form 8941, Credit for Small Employer Health Insurance Premiums, to calculate the small business health care tax credit.

Small businesses will include the amount of the credit as part of the general business credit on their income tax returns.

Tax-exempt organizations will include the amount of the credit on Line 44f of revised Form 990-T, Exempt Organization Business Income Tax Return. Form 990-T will be revised for the 2011 filing season to enable eligible tax-exempt organizations –– even those that owe no tax on unrelated business income –– to claim the small business health care tax credit.

For more information, see the IRS news release.

YouTube Primer on Health Care Credit

This new video explains the who, what, why and how of the small business health care tax credit.

Healthcare Reform Glossary

Click here for a link to definitions of some of the more commonly used terms about reform and related impacts of the Affordable Care Act.