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Are There Tax Incentives for Providing Group Health Insurance?

There are many reasons to offer group health insurance to your employees. Often times, offering a comprehensive health insurance package is necessary to bring in the best talent for your company. It can also define how long people remain with your company. But in some cases, employers also benefit from tax incentives. There are various situations in which your company could see reduced costs and taxes if you provide health insurance for your employees. It is always best to work with a tax professional to ensure you have the right plan in place to qualify.

Who May Qualify?

Some small businesses, in particular, qualify for tax discounts if they offer employees group health insurance. This is called the Small Business Health Care Tax Credit. It applies to employers who have fewer than 25 full-time employees. Those employees need to make an average of $50,000 a year or less for you to qualify for this particular tax incentive. If you pay at least 50 percent of your employees premium costs (for full-time employees only), then you may qualify. You also have to purchase a policy that meets the Affordable Care Act requirements.

If this occurs, then you may be able to obtain a tax credit for up to 50 percent of the contribution you make toward those premium costs you are paying for your employee. In other words, the amount you pay towards your employees’ health care coverage is cut in half through this credit. This can be up to 35 percent for tax-exempt employers as well.

It is important to note that employers who want to obtain this type of tax credit do not have to provide for part-time employees. If your employees are working under 30 hours a week, you do not have to offer coverage or pay for that coverage to qualify for this incentives. You also do not have to offer coverage to dependents to qualify for the tax credit.

What’s Right for You?

As an employer, it is always wise to secure a group health insurance plan that helps your employees to remain healthy and productive. With the right health insurance, you can keep those employees longer. This tax credit makes it easier for you to do just that.

Protect the interests of your staff. Call Cosmo Insurance Agency at (732) 363-3888 for more information on New Jersey group health insurance.