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Pros And Cons Of The ACA Increasing Small Business Tax Credit

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DISCUSS THE PROS AND CONS OF THE ACA INCREASING SMALL BUSINESS TAX CREDITS.
Pros of the ACA increasing small business tax credits
The Affordable Care Act started the Small Business Health Options Program (SHOP) for employers having small businesses (i.e. 1 - 50 full-time equivalent employees) who wish to offer health and dental coverage to their employees (“How…businesses”).
The tax credit included in the 2010 Affordable Care Act aims at assisting employers with small businesses to pay for employee health insurance and encourage to offer it more. If a business is eligible, they can receive a credit. For businesses that do not have indebted taxes, the credit can be carried either backward or forward to other tax years. However, the tax-exempt …show more content…

However, the efficacy of providing health insurance also depends on whether or not other competitors in the same industry are offering it as well.
• The business is entitled to certain tax advantages even if the business is small. Therefore, the out-of-pocket costs for an employer will be less than the benefit received by the employees.
• A business owner can deduct premiums for your employees. Also, if your business is incorporated the insurance cost of both your business and employees are deductible.
• The small businesses with less than 20 employees can use their health care tax credit to buy health insurance for employees.
• If a business owner is not in a position to contribute toward his employees' health insurance, they can offer employees group rates for buying it through the business.
• The insurance plans offer preventative care, failing in provision of which could result in having more employees being sick and not reporting to work for long periods of time due to serious …show more content…

This may be a costly affair for small business employers, thus, making financial planning extremely difficult.
• Sometimes, small businesses may share the cost of health insurance with employees to keep their expenses under control which means passing on additional costs to the employees making it an unpopular decision that causes more complications.
• A considerable amount of time would needed to find the right insurance options, filling out forms, remitting premiums, and acting as an intermediary between your employees and the insurer, along with dealing with other tasks.

REFERENCES

Akinnibi, F. (2013, December 09). Small businesses can save with health care tax credit. Retrieved from https://www.usatoday.com/story/money/business/small%20business/2013/12/09/small-business-affordable-care-tax-credit/3784909/
Should small businesses offer employee health benefits? (2016, May 31). Retrieved from http://www.smarthustle.com/should-small-businesses-offer-employee-health-benefits/ U.S. Centers for Medicare & Medicaid Services. How the Affordable Care Act affects small businesses. (n.d.). 7500 Security Boulevard.Baltimore, MD. Retrieved from

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