Posts Tagged - ‘small business’

Post border

Family Businesses Ineligible For Health Insurance Tax Credits

Tuesday, June 1st, 2010

Image: las under CC 3.0

Soon, tax credits will be provided to small businesses to help them afford group health insurance. However, those firms completely or mostly staffed by family members may not be able to take advantage of the 35% to 50% benefit.

Why? Family members have historically been exempt from business tax credit programs, because of the potential of unfairness and abuse of the system and nonrelated taxpayers.

Which employees won’t count towards the amount of tax credit received? According to the IRS, family members are considered to be:

  • A child or grandchild of the owner
  • a sibling or step-sibling
  • In-laws
  • Aunts and uncles
  • Parents, grandparents, and step-parents and step-grandparents
  • Nieces and nephews

The healthcare reform law will have little benefit for small businesses mostly staffed by relatives. However, those with relatively few family members employed will experience more positives.

Post border
Post border

Which Businesses Are Eligible for Health Insurance Tax Credit?

Friday, May 21st, 2010

Image: eneas under CC 3.0

One of the near-immediate benefits of healthcare reform is the creation of tax credits for small businesses, meant to encourage them to offer health insurance coverage to their employees.

The government has released guidelines detailing which companies are eligible for at least a partial subsidy. They are those that have:

  • Under 25 employees, and
  • an average salary less than $50,000 per year

However, in order to take advantage of the full 35% tax credit offsetting health insurance plan premiums, firms must have:

  • Fewer than 10 employees, and
  • an average annual salary under $25,000

Some small businesses believe that it’s a perverse incentive, given the fact that some companies would have to fire workers or cut their pay in order to become eligible.

Post border
Post border

Small Businesses Not Required to Change Group Health Insurance

Friday, May 7th, 2010

Image: lumaxart under CC 3.0

The bulk of the new healthcare reform mandates and changes take effect in 2014. However, they won’t affect all small businesses.

For companies with under 50 employees, their current group health insurance coverage will be grandfathered in. That means that they won’t be required to change it in any way, unless they make other changes to the plan.

This exception will be helpful to those businesses looking to save money on their health insurance plan through not offering more comprehensive coverage.

Post border
Post border

Small Business Optimistic About Group Health Insurance

Monday, February 1st, 2010


As expected by most small business owners, it was the State of the Union. Not the state of healthcare reform.

The omission was not lost on those in Congress and in the industry who had worked tirelessly on a plan that all parties could agree on, only to have their work suddenly shredded in Massachusetts. It was a development the Obama Administration would rather forget than to open up yet another page in the brief history of health care reform in the United States. But a quick snapshot of small business owners reveals a rather unexpected glimmer of hope after Obama’s first State of the Union address last week.

Amidst the tax cuts, elimination of capital gains taxes on small biz investments and his admission that small business lending had dried up after banks he advocated bailing out put their hands in their pockets when approached by small business owners for loans to get by, Obama bid another small but healthy wink to this group.

“By the time I’m finished speaking tonight, more Americans will have lost their health insurance. Millions will lose it this year. Our deficit will grow. Premiums will go up. Patients will be denied the care they need. Small business owners will continue to drop coverage altogether.” He then declared, “I will not walk away from these Americans, and neither should the people in this chamber.”

That bit of verbiage came after he dropped the TARP bomb, proposing that some $30 billion in unspent money bailing out the banks be used to shore up small businesses in the form of further tax breaks for hiring more employees. After all, he surmised, the big corporate guys don’t deserve huge hand outs when they are the ones banks are lending to.

“Even though banks on Wall Street are lending again, they’re mostly lending to bigger companies,” said Obama. “Financing remains difficult for small business owners across the country, even those that are making a profit.”

Speculation abounds about how small business owners will be able to afford group health insurance for the employees they expect to hire if the TARP proposal sees the light of day. But some of the most vocal small business representatives are cautiously optimistic that at least some of the President’s proposals will trickle down enough to breathe a little life into their business.

Dawn Sweeny, president of the National Restaurant Association, thinks the Senate version of the healthcare reform bill — the one with the national health insurance exchange, which favors individual health insurance plans — is the only viable option for most restaurant owners (which represent the largest contingent of small business owners in the United States).

“It is essential to the restaurant industry that the protections added to the Senate version of this legislation be included in the Congress enacts any reform.”

Post border