The federal government will allow certain Washington business owners to receive tax credits to cover up to 50 percent of their employees’ health insurance premiums in 2014.
To qualify for a tax credit, a small business must have fewer than 25 full-time employees, pay for at least 50 percent of their employees’ premiums and pay an average wage of $50,000 or less.
U.S. Sen. Patty Murray said in a statement this week that she was thrilled the move by the U.S. Treasury Department.
“Washington state has been a national leader in implementing the Affordable Care Act, and today’s announcement ensures that small businesses and their employees will have the same access to quality, affordable health plans as those on the individual market,” Murray said in the release.
It was also praised by state Insurance Commissioner Mike Kreidler.
“This is great news for the small businesses in our state,” said Kreidler in a release this week. “I know many of them care about their employees and have struggled to provide affordable coverage.”
Under the Affordable Care Act, certain small businesses that provided health insurance to their employees from 2010 to 2013 were eligible for premium tax credits of up to 35 percent. In 2014, the tax credit was to increase to 50 percent, but only if the employer bought the health plan through the state’s Small Business Health Options Program (SHOP) or Exchange.
Washington state is one of two states without a statewide small-business exchange or SHOP. SHOP plans are currently only available in Clark and Cowlitz counties, and the only insurer participating is Kaiser Foundation Health Plan of the Northwest.
Until the announcement from the Treasury Department, the small-business tax credit was only available to qualifying businesses in the two counties with an active SHOP program. It was up to the federal government to make an exception for Washington state.
Now, small businesses that meet the federal guidelines can receive a tax credit to help with the cost of providing health insurance to their employees — even if they purchase the plan outside of the exchange.
Small business owners can contact their own insurance providers to inquire how they can obtain the tax credit.
More information on the tax credit, and how to apply, is available online at www.irs.gov/uac/Small-Business-Health-Care-Tax-Credit-for-Small-Employers.
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