Zane Benefits Publishes New Health Care Tax Credit FAQ’s for 2013

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During 2013, Only Premiums Paid to a Health Insurance Issuer Count Towards the Health Care Tax Credit

Today, Zane Benefits, Inc. published new health care tax credit FAQ’s for 2013. Zane Benefits, which provides comprehensive and flexible alternatives to traditional employer sponsored health benefits, is the leader in defined contribution and health reimbursement accounts.

According to Zane Benefits’ website, early three years ago, the President signed the Affordable Care Act into law. As a result, small businesses could be eligible for a health care tax cut in 2013. Here are some FAQs to help small businesses determine if they are eligible for the credit this year.

What Expenses Count in 2013?

According to Zane Benefits’ website, only premiums paid by the employer under a qualified arrangement count. The employer must pay at least 50 percent of coverage. If the employer provides more than one type of coverage or if the employer’s health insurance provider does not charge the same premium for all enrolled employees, the employer may qualify even if he or she paid less than 50 percent of the premium cost for some employees. See section III.G of Notice 2010-82 for more guidance.

What is the Average Premium for the Small Group Market in a State, and Where Can Employers Find the Average Premiums for 2013?

According to Zane Benefits’ website, The IRS publishes the information for calculating the credit in the Instructions for Form 8941, Credit for Small Employer Health Insurance Premiums, each year. The IRS works with the Department of Health and Human Services to obtain the average premium figures for the Small Employer Health Care Tax Credit each year.

What Effect Do State Credits and State Subsidies for Health Insurance Have on the Amount of the Federal Health Care Tax Credit?

According to Zane Benefits’ website, some states offer tax credits or a premium subsidy to certain small employers who provide health insurance to their employees. Generally, the premium subsidy is in the form of direct payments to the employer or to the employer’s insurance company. The effect these credits and subsidies on an employer’s federal health care tax credit depends on whether the direct payment goes to the employer or the insurance company.
If a state tax credit or a premium subsidy is paid directly to the employer, the effect on calculation of the federal health care tax credit in general is zero.

If a state makes payments directly to an insurance company, the state is treated as making these payments on behalf of the employer. That may affect whether the employer is still paying 50 percent of workers’ health insurance costs.

State payments aside, the federal health care tax credit cannot exceed the amount of the employer’s net premium payments. In the case of a state tax credit for an employer or a state subsidy paid directly to an employer, the employer’s net premium payments are calculated by subtracting the state tax credit or subsidy from the employer’s actual premium payments. In the case of a state direct payment to an insurance carrier, the employer’s net premium payments are the employer’s actual premium payments.

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About Zane Benefits

Zane Benefits was founded in 2006 to provide a revolutionized SaaS (Software-as-a-Service) administration platform ("ZaneHRA") for Health Reimbursement Arrangement (HRAs) and defined contribution healthcare. The flagship software provides a 100% paperless administration experience to employers and insurance professionals that want to offer better health benefits without a traditional group health insurance plan at lower costs. For more information about ZaneHRA, visit

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Ryan Knapp
Zane Benefits
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