November 25, 2013 Small Employer Tax Credit for Employee Health Insurance
As we have previously advised you, the Affordable Care Act (“the ACA”) imposes a “pay or play mandate on employers with 50 or more full-time and full-time equivalent employees. In general, this provision requires these employers to provide affordable health insurance to at least 95% of their full-time employees or pay a penalty. The ACA encourages small employers; i.e., those with fewer than 25 full-time employees, to offer health insurance by providing them with a tax credit. This memorandum provides a summary of the small business tax credit provision.