Instructions For Form 8941 - Credit For Small Employer Health Insurance Premiums - 2010 Page 3
ADVERTISEMENT
1
2
3
4
5
6
7
8How to figure average annual wages. To figure the
will need an additional set of calculations if the premium
average annual wages you paid for the tax year, you
amounts changed during the tax year.
must do the following.
Health Insurance Coverage
1. Figure the total wages paid (discussed below) for
For credit purposes, health insurance coverage means
the tax year to all individuals considered employees.
benefits consisting of medical care (provided directly,
2. Divide the total wages paid by the number of FTEs
through insurance or reimbursement, or otherwise) under
you had for the tax year (discussed earlier).
any hospital or medical service policy or certificate,
3. If the result is not a multiple of $1,000 ($1,000,
hospital or medical service plan contract, or health
$2,000, $3,000, etc.), round the result down to the next
maintenance organization contract offered by a health
lowest multiple of $1,000. For example, $25,999 is
insurance provider.
rounded down to $25,000.
A health insurance provider is either an insurance
Employee wages paid. Wages, for this purpose, mean
company or another entity licensed under state law to
wages subject to social security and Medicare tax
provide health insurance coverage.
withholding determined without considering any wage
Health insurance coverage also includes coverage
base limit. But do not include wages paid to any seasonal
under the following plans.
employees who worked 120 or fewer days during the tax
•
Limited scope dental or vision plans.
year.
•
Long-term care plans.
•
Nursing home care plans.
Employer Premiums Paid
•
Home health care plans.
•
Only premiums you paid for health insurance coverage
Community-based care plans.
•
under a qualifying arrangement (discussed later) for
Any combination of the above.
individuals considered employees are counted when
In addition, health insurance coverage includes the
figuring your credit. For this purpose, if you are entitled to
following.
a state tax credit or a state premium subsidy paid directly
•
Coverage only for a specified disease or illness.
to you for premiums you paid, do not reduce the amount
•
Hospital indemnity or other fixed indemnity insurance.
you paid by the credit or subsidy amount. Also, if a state
•
Medicare supplemental health insurance.
pays a premium subsidy directly to your insurance
•
Certain other supplemental coverage.
provider, treat the subsidy amount as an amount you
•
Similar supplemental coverage provided to coverage
paid for employee health insurance coverage.
under a group health plan.
If you pay only a portion of the premiums and your
Employer premiums paid for health insurance
employees pay the rest, only the portion you pay is taken
!
coverage can be counted in figuring the credit
into account. For this purpose, any premium paid through
only if the premiums are paid under a qualifying
CAUTION
a salary reduction arrangement under a section 125
arrangement.
cafeteria plan is not treated as an employer paid
Health insurance coverage does not include the
premium. For more information on cafeteria plans, see
following benefits.
section 1 of Publication 15-B, Employer’s Tax Guide to
•
Coverage only for accident, or disability income
Fringe Benefits.
insurance, or any combination thereof.
Example 3. You offer health insurance coverage to
•
Coverage issued as a supplement to liability insurance.
employees under a qualifying arrangement that requires
•
Liability insurance, including general liability insurance
you to pay 60% of the premium cost for single
and automobile liability insurance.
(employee-only) coverage for each employee enrolled in
•
Workers’ compensation or similar insurance.
any health insurance coverage you provide to
•
Automobile medical payment insurance.
employees. The total premium for each employee
•
Credit-only insurance.
enrolled in single (employee-only) coverage is $5,200 per
•
Coverage for on-site medical clinics.
year or $100 ($5,200 ÷ 52) for each weekly payday. The
•
Other similar insurance coverage, specified in
total premium for each employee enrolled in family
regulations, under which benefits for medical care are
coverage is $12,376 per year or $238 ($12,376 ÷ 52) for
secondary or incidental to other insurance benefits.
each weekly payday.
Also, because the coverage must be offered by a
Each payday you contribute $60 (60% of $100) toward
health insurance provider as discussed above, health
the premium cost of each employee enrolled in single
insurance coverage does not include benefits provided
(employee-only) coverage and withhold the remaining
by the following.
•
$40 from the employee’s paycheck to obtain the $100
Health reimbursement arrangements (HRAs).
total weekly premium. Each payday you contribute $60
•
Flexible spending arrangements (health FSAs).
•
(the same amount you pay toward the premiums of
Coverage under other self-insured plans.
•
employees enrolled in single coverage) toward the
Health savings accounts (HSAs).
premium cost of each employee enrolled in family
However, health insurance coverage may include
coverage and withhold the remaining $178 from the
coverage under the following plans.
employee’s paycheck to obtain the $238 total weekly
•
Church welfare benefit plans.
premium.
•
Multiemployer health and welfare plans that provide
To determine the premiums you paid during the tax
coverage through a health insurance provider.
year, multiply the number of pay periods during which the
For details, see Notice 2010-82 as discussed under More
employee was enrolled in the health insurance coverage
Information on page 5.
by $60. For example, you would have paid $3,120 ($60 ×
Qualifying Arrangement
52) for an employee who was enrolled for the entire tax
year. You would have paid $600 ($60 × 10) for an
For a tax year beginning in 2010 only, a qualifying
employee who was only enrolled for 10 pay periods. You
arrangement includes any arrangement that requires you
-3-
ADVERTISEMENT
0 votes
Related Articles
Related forms
Related Categories
Parent category: Financial