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Covered California Q&A

Covered California and Obamacare related questions from consumers, employers and agents are answered by Phil Daigle with the best information available at the time. Archived entries may no longer be accurate as the Covered California and Obamacare knowledge-base is evolving quickly. TO REQUEST A PERSONAL RESPONSE INCLUDE EMAIL ADDRESS.

Small Business Tax Credit

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Question: It is my understanding that small employers with under 25 employees who are low wage, may qualify for a 50% subsidy in 2014 in Covered CA. If this is correct, will the 50% subsidy continue in 2015 and out, or be phased out?

Answer: Yes. There is a tax credit of up to 50% percent of the employer’s eligible premium expenses for tax years 2014 and 2015. Beginning in 2014 coverage must be purchased from Covered California to qualify for a tax credit. The Small Business Tax Credit has been available since 2010, with a sliding-scale tax credit of up to 35 percent of the employer’s eligible premium expenses for tax years 2010-2013.

Employers that provide health care coverage to their employees are eligible for the Small Business Health Care Tax Credit if:

  • They employ fewer than 25 full-time employees.
  • Annual average earnings wage per employee is less than $50,000 per year.
  • They pay at least 50 percent of employees’ premium cost for health insurance coverage.

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