The euro currency continued sinking this week, falling to the lowest price since 2010.FORT WAYNE – A new tax credit could make it easier for small employers to offer health insurance to workers, a consumer advocacy group said Wednesday.
About 93 percent of Indiana businesses with fewer than 25 employees will be eligible to claim the tax break, according to a study commissioned by Families USA, a non-profit, non-partisan group based in Washington, D.C.
That percentage equals 88,100 Indiana companies, according to the study, which was also sponsored by Small Business Majority, a non-profit, non-partisan business advocacy group based in Sausalito, Calif.
Nationwide, more than 4 million small businesses – or 83.7 percent – will qualify.
This is the first year for the tax credit, which was approved by the Obama administration in March as part of the Patient Protection and Affordable Care Act.
Last year, fewer than half of employers with three to nine workers offered health coverage to employees. The majority of the 54 percent that didn’t offer coverage said it was because it cost too much.
Kathleen Stoll, Families USA’s deputy executive director, said officials hope tax breaks will help more companies offer coverage. And employers who’ve considered dropping health insurance to cut costs might now be able to keep that benefit.
The tax breaks are offered on a sliding scale, with the smallest businesses paying the lowest wages being able to claim the most.
The full tax credit this year is 35 percent of a company’s health care costs. That number increases to 50 percent in 2014.
Non-profit organizations can claim up to 25 percent this year.
About 7 percent of small businesses in the state cannot claim the tax credit because they exceed the average salary limit of $50,000 or because they don’t pay at least half of employees’ premium expenses, according to the study.
The act allows companies to count two part-time workers as one full-time employee to qualify for the tax credit.
As with most legislation, the details are seemingly endless.
Ed Romary, owner of Romary Associates, stays busy taking care of his construction company’s clients. He relies on Ken Lizer, president of Employer’s Administrative Services of Indiana, for guidance on health insurance.
“This stuff is coming at us so fast, most of us don’t know what to do,” Romary said.
Lizer’s firm acts as a human-resources office for small businesses. His customers “most definitely” struggle with escalating health care costs.
“One of our clients had a 50 percent increase in premiums this year, which hits you between the eyes,” Lizer said.
The company has an aging workforce and experienced numerous claims last year, he said.
Lizer hopes business owners will educate themselves about the tax credit and take advantage of it. For more information, he suggests consulting an insurance agent or an accountant.
“A lot of people hear about this,” he said, “and don’t know what to do.”
