The Affordable Care Act makes changes across the health care system that will impact employers creating new opportunities and responsibilities for Massachusetts employers. Check this page for information and activity on federal health reform for employers and small businesses.

  • State Forums for Employers on Federal Health Care Reform. The Health Connector and Associated Industries of Massachusetts (AIM) teamed up in the fall of 2013 by holding events for employers to hear from and speak with executives from key regulatory agencies on National Health Reform and its implementation in the Commonwealth. AIM's in-house experts discussed day-to-day management, timelines, compliance and administrative implications for the employer community.
  • The Massachusetts Employer’s Comprehensive Guide to National Health Reform (PDF)
    This guide is intended to provide a comprehensive overview of the aspects of national health reform that affect employers. It is written to be a tactically useful resource for Massachusetts business owners, human resources professionals, brokers, consultants, advocates, legislators and legislative staff, among others. The primary audience is small and mid-size fully-insured employers and the human resources and policy professionals that work with them.

Learn about the New Small Business Federal Tax Credit

The new national health reform law ("PPACA") signed into law by the President on March 30, 2010 includes a small business health care tax credit, effective immediately, which is designed to help small employers offer health insurance coverage for the first time or maintain coverage they already have.

The credit is available to small employers that pay at least half of the cost of individual coverage for their employees in 2010. The credit is specifically targeted to help small businesses and tax-exempt organizations that primarily employ low and middle-income workers.

For tax years 2010 to 2013, the maximum credit is 35 percent of premiums paid by eligible small business employers and 25 percent of premiums paid by eligible employers that are tax-exempt (non-profit) organizations. The maximum credit goes to the smallest employers - those with 10 or fewer full-time equivalent (FTE) employees - paying annual average wages of $25,000 or less, but partial credits are available for employers with up to 25 FTEs and with average wages up to $50,000. Because the eligibility rules are based in part on the number of FTEs, not the number of employees, businesses that use part-time help may qualify even if they employ more than 25 individuals.

Eligible small businesses can claim the credit as part of the general business credit starting with the 2010 income tax return they file in 2011. For tax-exempt organizations, the IRS will provide further information on how to claim the credit.

The Tax Credit will Help Small Businesses in Massachusetts

  • Massachusetts small businesses have been struggling with the rising costs of health insurance coverage, and this tax credit will help offset many of those costs, allowing these businesses to keep offering coverage, or to start offering for the first time, while protecting business' ability to continue to grow and create new jobs.
  • In April 2010, the IRS sent postcards out to 102,135 Massachusetts small businesses and tax-exempt organizations to make them aware of the benefits of the recently-enacted small business health care tax credit. That represents more than half of the employers in Massachusetts.
  • In late January 2011 Treasury Secretary Timothy Geithner sent a letter to a number of small business trade organizations to ask for their help in getting the word out about the new Small Business Health Care Tax Credit created by the Affordable Care Act. Secretary Geithner's letter included an informative pamphlet about increased coverage and health exchanges for the organizations to send to their members to help them make the most of the new tax credit this filing season.
  • To mark the one-year anniversary of the enactment of the Affordable Care Act, Health and Human Services highlighted the law's benefits for small businesses. On March 21, 2011 the Small Business Administration released a memo to help businesses understand their eligibility for the health reform law's tax credit. Health and Human Services also released a new flyer for small businesses available at (PDF).

For More Information

The IRS has issued several materials and resources to help employers determine if they are eligible, and if so, how to go about getting the tax credit:

This information is provided by the Executive Office of Health and Human Services.