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Priority providing benefits through Local First
Local First has struck a deal with Priority Health to offer its 600 members health insurance, just in time for small businesses that may want to take advantage of a new tax credit under health care reform.
Priority Health offered to recognize Local First as a group eligible for health insurance, giving small businesses a chance to provide coverage for employees and possibly qualify for a federal tax credit.
“We know that health insurance is a big issue for many of the businesses we work with,” Executive Director Elissa Hillary said. “When we poll members to find out things they are interested in and struggle with, access to health insurance and affordability frequently come up.”
Also a member of Local First, Priority Health approached the Grand Rapids group with the idea, Hillary said.
“This is our way of supporting smaller organizations,” said Nancy Busch, director of small business sales for Priority Health.
Annual Local First membership dues range from $50 to $500. The health insurance prices will be set between the individual business and Priority Health, Hillary said.
“So many local businesses can either not afford health care for their employees or are not affiliated with an eligible group,” Hillary said.
The announcement comes on the heels of the Internal Revenue Service’s release of final guidance for employers who want to claim the new small business health care tax credit for 2010. The credit is part of the Patient Protection and Affordable Care Act that ushered in health care reform.
The credit is aimed at small businesses and nonprofit organizations that pay at least half of the premiums for health care coverage for moderate and low-income employees.
For the maximum credit for businesses with 10 or fewer full-time equivalents, average annual wages must be $25,000 or less. The credit decreases gradually and phases out for companies with 25 or more FTEs and average annual wages of at least $50,000.
The IRS clarified its view of qualifying organizations to include small employers who provide coverage through “multiemployer health and welfare plans.” Also OK to the IRS are religious organizations that have coverage through their denominations.
On its website, www.irs.gov, the agency posted the new Form 8941 for the tax credit, a revised Form 990-T, as well as instructions and the related Notice 2010-82.
The tax credit is available for the 2010-2013 tax years, plus two additional years at higher rates.
Through 2013, the maximum credit is 35 percent of premiums paid for small business and 25 percent for tax-exempts groups.
Those go up to 50 percent and 35 percent, respectively, starting in 2014.
Because eligibility is based on full-time equivalents, companies that employ more than 25 part-time workers still may qualify.