As the March 15 corporate tax filing deadline approaches, California’s small businesses need to know they may qualify for an important health care tax credit available under the Affordable Care Act.

The Small Business Health Care Tax Credit provides a credit equaling up to 35 percent of the health insurance premium costs that a small business incurred for insuring its employees. The credit is designed to help small businesses and tax-exempt organizations that primarily employ moderate and lower-income workers either maintain existing coverage or offer health insurance to their employees for the first time.

Certified Public Account and tax expert Conrad Davis, Crowe Horwath LLP, explains that more businesses need to be made aware of this benefit of the law aimed at small employers.

“Right now the credit is underutilized,” Davis said in an interview with CalChamber News. “The studies show that not as many businesses that are eligible are participating.”

According to a recent study, more than 375,000 small businesses in California are eligible for health insurance tax credits for a total value of more than $1.8 billion.

Small employers that pay at least half of the premium for employee health insurance coverage may be eligible for the Small Business Health Care Tax Credit, according to the Internal Revenue Service (IRS).

CalChamber News has the full story, including more details on which employers qualify for the tax credit.

In January, the U.S. Treasury Department and the Internal Revenue Service published proposed rules and new Q&A's providing guidance with respect to the employer “shared responsibility” excise tax under section 4980H of the Internal Revenue Code, which was added by the Patient Protection and Affordable Care Act and is effective beginning in 2014. 78 Fed. Reg. 217 (January 2, 2013)  

As we all know, there was a big push under federal health care reform for plan sponsors to amend health plans for the 2011 plan year. 

Though 2012 will not be a year of quite so many changes, there is still work to do to ensure you are in compliance with health care reform measures for the year under the Patient Protection and Affordable Care Act (PPACA).

You will need to add these "to dos" to your 2012 PPACA checklist:

Final regulations on summary of benefits and coverage (SBC) are available. Insurers, employers and administrators — pay close attention to these rules because they will apply to open enrollment that begins on or after September 23, 2012.

On August 22, 2011, the departments of Health and Human Services, Labor, and Treasury (the agencies) issued proposed regulations on the requirements for drafting and issuing SBCs and the uniform glossary that is required to be provided by plans as well.  

A summary of those proposed regulations are available here. 

On February 9, 2012, the agencies released final regulations on the requirements for drafting and issuing SBCs and the uniform glossary that is required to be provided by plans as well. The new rules take effect on April 16, 2012.   

As the March 15 corporate tax filing deadline approaches, the California Chamber of Commerce is reminding small businesses to take advantage of the small business health care tax credit. The tax credit is part of the federal 2010 Affordable Care Act.

The credit is worth up to 35 percent of a small business's premium costs (25 percent for tax-exempt employers). In 2014, this rate increases to 50 percent (35 percent for tax-exempt employers).

California small businesses can review the Internal Revenue Service (IRS) guidelines to determine eligibility for the tax credit on the new business-oriented website,www.healthlawguideforbusiness.org. The website offers a “tax credit calculator” that helps employers estimate savings available under the law.

Qualifying for the Credit

To qualify, an employer must have fewer than the equivalent of 25 full-time workers (for example, an employer with fewer than 50 half-time workers may be eligible). A qualifying employer also must pay average annual wages below $50,000.

A group of California business organizations launched a new website to help California businesses understand their obligations under the dense and complex Patient Protection and Affordable Care Act.

Health Law Guide for Business is designed to provide accurate and easy to understand information on federal health care reform. The website’s motto is “2,409 pages. One simple web site.”

The U.S. health care industry is undergoing a transformation. As legislation, incentives, and benefits roll out over the next few years, small businesses should seize the opportunities created by health care reform, including new and more affordable options for insurance coverage.