Health Care Reform Bill
Posted: March 26, 2010
Whether the health care reform bill ever comes to fruition in its current form is anyone's guess. But I became interested in the just-passed business tax credit portion of the health care overhaul since much of the early publicity about the program touted the tax credit concept. At first glance, though, it appears to me that this business tax credit concept would do nothing to help small businesses in West Central Wisconsin.
The measure is designed to provide business tax credits to small businesses with no more than 25 employees and average annual wages of $40,000 to receive tax credits to help provide insurance to employees. The tax credit would be up to 35 percent of the employer's contribution if the employer pays 50 percent of the total premium cost.
This may have been a wasted exercise on my part, but I wanted to find out by using simple math whether this formula even applies to many businesses in the Chippewa Valley. But I think my example produces more questions than answers.
For instance, if an employee's annual premium for health insurance is $10,000 and if the employer pays half of that ($5,000), then the business owner is eligible to receive 35 percent ($1,750) in tax credits. Is that worth it? I am not sure, because if the employer is already paying half of their employees' health insurance premiums, then obviously it would be advantageous for that business owner to apply for the tax credit.
But, how many businesses in this region have 25 employees or less that average $40,000 a year in wages? Frankly, I have no idea. But I do know that $40,000 in Western Wisconsin is not the same as earning $40,000 in a major metropolitan area.
I would be interested to know how many subscribers to The Bottom Line would qualify to apply for tax credits. For instance, if there is a quantifable number of companies that can afford to continue providing health insurance to their workers because they will be able to use some of the tax credits for other things like capital expenditures, paying down debt or even hiring a few more workers, this program may be worth a glance.
I am guessing that there are not too many local companies that would be eligible for this tax credit proposal. But I could be wrong. Please take time to call (834-7337) or e-mail: email@example.com about whether your company would qualify. And by all means, point out anything that reinforces the thought that this proposal will have little or no impact on the Chippewa Valley.