In Rev. Rul. 2010-13, Average Premium for Small Group Market for Determining the Small Employer Health Insurance Credit, the Internal Revenue Service (IRS) and the Department of Health and Human Services (HHS) released the chart containing the small group market in each state for the 2010 taxable year. Under the health care reform, employers are allowed a credit in certain situations if they pay a portion of their employees’ health insurance premiums. The credit is limited to the lesser of:
- The amount of nonelective contributions paid by the eligible small employer on behalf of employees under the arrangement during the taxable year, and
- The amount of nonelective contributions the employer would have paid under the arrangement if each such employee were enrolled in a plan that had a premium equal to the average premium for the small group market in the state (or in an area in the state) in which the employer is offering health insurance coverage.
The State of Idaho had the lowest rates at $4,215 for employee-only coverage and $9,365 for family coverage while the Commonwealth of Massachusetts had the highest rates at $5,700 and $14,138, respectively. Family coverage includes any coverage other than employee-only (or single) coverage.
According to Rev. Rul. 2010-13:
HHS recognizes that there may be areas in some States with meaningfully higher premium rates. For the 2010 taxable year, HHS may provide additional average premium rates for the small group market in certain areas within States. However, in no case will any such additional sub-State rates be lower than the applicable rate for each State that is set forth in this Revenue Ruling.
Contact Vision Payroll for further information on the average premium for the small group markets during 2010.