As a client and/or friend of the Brunini Firm you are receiving an Update on the Patient Protection and Affordable Care Act [PPACA]. This introductory Update is the first of many we anticipate sharing with you as new information is released from the various governmental authorities issuing "guidance" or "regulations" relating to PPACA. Currently, our website has various summary sources on PPACA, including a slide presentation focused on insurance reform as well as other graphic summaries. We anticipate a medical provider focused slide presentation being available in the very near future. We trust this information will be helpful as we all move forward in implementation of PPACA. Feel free to contact us if you would like to discuss any aspect further.

Small Employer Tax Credit

There are many challenges to the employer under the Patient Protection and Affordable Care Act.  One challenge applies to the Small Employer Tax Credit.  The tax credit is associated with the Small Employer who offers insurance coverage and pays at least 50% of the premium for the employee.

The tax credit is available to Small Employers with 10 or fewer Full Time Employees with $25,000 or less income and to Small Employers with 25 or fewer Full Time Employees with $50,000 or less income.  The tax credit is up to 35% with a sliding scale based on number of Full Time Employees and income for years 2010-2013 and up to 50% in 2014-15.  The tax credit is only available in 2014-15 for Small Employers with their employees in the Exchange and can only be taken for two tax years beginning in 2014.

Although the good news is the tax credit, the challenge is the process of determining whether your company qualifies as a Small Employer – the counting of Full Time Employees and the equivalent.  There is no one size fits all counting method.  We attach a diagram attempting to cover the key points [link] and also provide the IRS’s Notice 2010-44 issued May 17, 2010 providing Treasury’s guidance on how to count [link].

PPACA §1421 and 10105 and IRC §§414 and 1563

Authored by: Cheri D. Green

This Newsletter is a publication of the Health Care Department of the law firm of Brunini, Grantham, Grower & Hewes located in Jackson, Mississippi.. The Newsletter is not designed or intended to provide legal or professional advice, as any such advice requires the consideration of the facts of the specific situation.