Small Employer get health care tax credit for 2010

By: Cynthia Van Bogart, JD Boardman Law


Here is your latest Employee Benefits Update from Cindy Van Bogaert, Partner and Chair of the Employee Benefits Practice Group at Boardman Law Firm LLP.  This Employee Benefits Update provides information about one of the Health Care Reform changes that has an immediate impact for employers with group health plans.

As you may know, Health Care Reform has staggered effective dates for different changes. For example, the so-called "Cadillac Plan" excise tax is not effective until 2018. There are items that will be effective much sooner. One of those changes is the small employer health insurance tax credit which is available in 2010. Qualifying small employers are entitled to a tax credit. One of the limitations is that employers have no more than 25 full-time equivalent employees who meet other requirements in the law. However, as with many things in the tax code, even counting to 25 is not straightforward. The new law includes a number of special rules, including exclusions for some employees and rules for assessing how part-time employees are taken into consideration.

The IRS has issued informal guidance on the small employer tax credit on its website in several places:,,id=220809,00.html?portlet=6,,,id=220839,00.html, and,,id=220848,00.html.

What should employers do?

– Check with counsel to see if the employer meets the various requirements in the law for the tax credit.