(1) The credit applied to firms less than 25 employees. However, its sweet spot was ten employees, and the credit began to phase-out in excess of that number. That eleventh employee would cost you when calculating the credit.
(2) The credit phased-out when average payroll exceeds $50,000. It sweet spot was $25,000 or less, and the credit began to phase-out in excess of that number. Many of us were quizzical on the $25,000 strike, as average American household income is approximately twice that amount. Maybe Congress was dividing the average household income between two spouses. Who knows.
(3) Owners and their families were excluded from the credit. For many small businesses, the owner and family are a significant portion, if not the majority, of the work force. Congress had already imposed the 10/25 and $25,000/$50,000 rules, so was it necessary to also have an “off with the owners’ heads” rule?
COMMENT: Someone please explain to Congress that excluding owners from a tax incentive is not incentivizing.
(4) There was a cumbersome calculation of “full-time equivalents” that may have tested the limited accounting resources of many small employers.
(5) The employer had to pay at least 50% of the premiums for all employees to qualify for the credit. This may be the least onerous requirement.
- SHOP was to be accessible starting October 1, as were individual policies.
- The SHOP website is accessible through HealthCare.gov, or it would be assuming the thing ever works.
- The Obama administration said in 2011 that SHOP would allow small employers to offer a choice of qualified health plans to their employees, akin to larger businesses. This “choice option” was to be available in January 2014. Administration officials have said they would delay the “choice option” until 2015 in the 33 states where the federal government runs the exchanges. This means employers would have only one plan to choose from for 2014.
- The Obama administration announced on September 26 that the opening of SHOP would be delayed a month, until November 1.
- On Tuesday, October 29, 2013, Marilyn Tavenner, the Head of the Center for Medicare & Medicaid Services, said the SHOPS would be functional “at the end of November.”
- Businesses seeking coverage effective January 1, 2014 must enroll by December 15. Remember Ms. Tavenner’s comment about the “end of November.” This means that small could have as little as 15 days to enroll in SHOP.
- A cumbersome credit calculation …
- That will expire after two more uses …
- For health insurance a small business may not be able to buy, resulting in …
- A tax credit that approaches a work of fiction.