Industry Note:
Small Businesses Eschew Tax Credit, GAO Finds
Published on Thu Jun 07, 2012
If you're not using the Small Employer Health Insurance Tax Credit, you're not alone. When the tax credit was passed as part of health care reform in the Affordable Care Act, the government and advocacy groups estimated that as many as 4 million employers might use it. But in 2010, only about 170,300 small employers used it, the Gov-ernment Accountability Office notes in a new report, "Small Employer Health Tax Credit: Factors Contributing to Low Use and Complexity.""One factor limiting the credit's use is that most very small employers, 83 percent by one estimate, do not offer health insurance," the GAO notes in report summary. "The credit was not large enough to incentivize employers to begin offering insurance."Complex rules on FTEs and average wages also limited use, the GAO adds. And the time needed to calculate the credit deterred claims. The report is online at www.gao.gov/products/GAO-12-549.The government and others had [...]