Certain healthcare tax credits are made available to small businesses even today. The small business healthcare tax credit is already in place. It is found that companies with sizeable number of workers are able to provide health insurance at an affordable rate. This is because the risk to the insurer is distributed on many individuals.
Employers, who cover half of the health insurance costs of their workers and employ less than 25 full-time workers, actually qualify for this small business tax credit. This credit scheme covers 35% of the costs that an employer must meet with respect to insurance premiums concerning small businesses. It is assumed that factors like slow economy, low consumer spending and the conviction that health is a costly affair can be easily overcome by this tax credit scheme. It makes possible for workers to receive health insurance in a small business environment. The employers too can reap the benefits offered by this IRS tax credit scheme and provide coverage to their workers or implement a new plan for workers who were previously uninsured.
Small businesses also find it easier to reduce the costs involved with health insurance. This is normally done by shopping around and collecting quotes from insurance agencies. Also, paying the premium sometimes becomes difficult in case of small business owners. Insurers too consider small companies to be at a higher risk than companies with large number of employees. There is also the advantage of earning more number of premiums with large companies. Here, insurers get the opportunity to earn more premiums in comparison to what they have to pay as medical costs. In case of small businesses, there is the concern among insurers that even one high cost medical treatment can overshadow the premium amount that they get to collect from small businesses.
It is only under the small business tax-credit scheme that overall payments to small business employees can be slashed to a great extent. It is true that not all small companies may qualify for this credit scheme. But then businesses that find it difficult for them to continue with their tax-credit coverage, can rely on this tax credit incentive, as it s going to provide a safety net to their workers.
This article was submitted by Rohit Arora, co-founder of Biz2Credit. Biz2Credit is a small business marketplace that connects entrepreneurs with financing options and advice to grow their business. Send all questions to