There has been much debate during the last few years about the recent healthcare reform known as The Affordable Care Act. Politicians and pundits from both sides of the aisle have poked and prodded at the law, even challenging its constitutionality in the United States Supreme Court. Now that it seems the law is here to stay, it is worth looking at how it can tangibly affect you as a business owner.
One of lesser publicized parts of the law is the Small Employer Tax Credit. This part of the law was enacted in an effort to reduce the overall cost of health insurance for small businesses with fewer than 25 employees. Right now your business can receive a tax credit (which is a dollar for dollar reduction) up to 35% of the cost of providing health insurance to your employees. In 2014 this credit will be bumped up to a maximum of 50% of the total cost.
So what does this mean in real dollar terms for your business? There are a variety of factors that go into the calculation of the credit such as hours worked, wages paid, number of employees on the plan, etc. However during the past year we have seen these credit amounts usually in the $1,000-$5,000 range for dental offices, which translates to $1,000 – $5,000 extra in your pocket as a business owner. In 2014 we could expect this credit to be closer to $1,400 – $7,000, all other things being held constant.
Even though this is one of the least controversial parts of the new law, it is something that will touch most dental practices that provide health insurance to their employees each year. If you ever have questions about how the Affordable Care Act could affect your business or if you would be eligible for this credit, please give us a call.