Examples
These examples are provided to assist you to understand how the credit works.
Example One
A small employer with 15 employees:
- Tax year: 2019
- Employer's share of total premiums: $48,750
- State subsidies and tax credits: $0
- Tax exempt employer: No
- Employees who worked at least 2,080 hours: 15
- Part time hours: 0
- Total wages paid: $300,000
- Plan Offered to employees:
- Name: Plan A
- Offered in Dunklin county, Missouri
- All employees are enrolled in self-only coverage and the annual cost of Self is $6,500 with the employer paying $3,250.
This employer may be eligible for a credit of $16,200. The employer's maximum credit would be $24,375 (50 percent of $48,750). However, because the employer has 15 full time equivalent employees, there is a full-time equivalent employee phase out of $8,125.00. The employees' average annual wages is $20,000, so the annual average wage phase out doesn't apply.
The full-time equivalent employee phase out is subtracted from the maximum credit.
Example Two
A small employer with 10 employees – but each is part-time working 128 hours each month.
- Tax year: 2019
- Employer's expected share of total premiums: $25,000
- State subsidies and tax credits: $0
- Tax exempt employer: No
- Employees who worked at least 2,080 hours: 0
- Part time hours: 15,360 hours
- Total wages paid: $230,400
- Plan Offered to employees
- Name: Plan A
- Offered in Yellowstone county, Montana
- All employees are enrolled in self-only coverage and the annual cost of Self: $5,000 and the employer pays $2,500.
This employer has 7 full time equivalents for purposes of the credit. This employer may be eligible for a credit of approximately $10,100 after an estimated wage phase out of $2,315 because the average wages were $32,000.