Many small business owners are worried about the new healthcare plan President Obama is going to implement, and yet it is important to understand what the new small business medical insurance tax credit policies are before rushing to jump to any conclusions. Small business medical insurance has long been a sore spot with small business owners who want to offer coverage to their employees but cannot withstand exorbitant out of pocket costs to do so. This type of mentality makes tackling the issue of providing small business employees with health insurance coverage an ambitious undertaking. In recent polls, small business owners were evenly split between those who opposed and those who supported the new mandate. The tie breaker may just be found in understanding the impact the new mandate will have on small business owners nationwide.

What are the costs of noncompliance with offering small business medical insurance? 

Federal legislators are proposing that offering employees small business medical insurance will provide small business owners with tax relief that is substantial enough to amount to cost savings for the business across the board. The first thing to understand is that for federal purposes, a 'small business' is a company that earns less than $250,000 in revenues annually. The second thing to understand is that there is a high cost for noncompliance. For employers who fail to provide employees with health care coverage options, including options with a waiting period of up to two months, they will be liable to pay a penalty tax of between $400 and $750 per full-time employee. For businesses that are still non-compliant after 60 days, there will be a $600 penalty per employee.

What are the benefits of compliance with offering small business medical insurance? 

The small business medical insurance tax credit becomes available at the start of the 2010 calendar year. Qualifications include that the business must offer employees a group health plan and that the employer must pay at least 50 percent of the premium costs. Businesses that maintain 25 or fewer full-time eligible employees with average annual wages averaging less than $50,000 per full-time employee qualify for the small business medical insurance tax credit. This tax credit is calculated based on equal parts the percentage of what the employer pays for small business medical insurance and the average cost of premiums in the state's available group insurance plans. In 2010 and through 2013, for profit employers max out the tax credit at 35 percent of the employer's insurance contributions, and non profit employers max out at 25 percent. Starting in 2014, the full tax credit is offered to employers with ten or less full-time eligible employees who have average annual wages at $25,000 or lower. Employees with more than 25 employees are not eligible for a small business medical insurance tax credit for providing small business medical insurance to employees.

Obtaining a small business medical insurance quote is simple. For more information on small business medical insurance, request a quote from us at www.medicalinsurancequotes.com today.