The Daily Record
July 22, 2013
By Alissa Gulin

About 5,000 small businesses in Howard County will soon receive a letter from state Comptroller Peter Franchot urging them to apply for tax credits created by the Affordable Care Act to help offset the cost of providing health insurance to employees. Several of those business owners said they appreciate the outreach and welcome any information they can get about a law many still find confusing.

About 60 people turned out for a forum Monday at Howard County Community College where state officials and health care advocates explained eligibility requirements for the tax credit.

“I think this strategy is great,” said M. Jason Brooke, CEO and general counsel for Vasoptic Medical Inc., a Columbia-based medical diagnostic startup. “I wouldn’t have known about the tax credit if I hadn’t been here today — I mean, hopefully I’ll receive the letter in the mail. But I think it’s fantastic to get the word out and help us understand how we can provide care for our employees. I think [the letter] will absolutely work. I think a lot of people will recognize that there’s an opportunity to save on taxes, which is really helpful.”

Businesses (and nonprofits) can receive credits of as much as 35 percent of eligible premium expenses for tax years 2010 through 2013. Next year, the maximum tax credit increases to 50 percent. Small employers can receive the credit if they employ fewer than 25 full-time workers, pay an average wage of less than $50,000 and cover at least 50 percent of the employee-only premium cost (the credit varies based on the number of employees and the average wage).

The comptroller’s letter is only being sent to eligible businesses.

“You know, this is not something the Comptroller’s Office typically does, but we’re interested in it because … no one else has access to the information about these small businesses’ eligibility,” Franchot said after the forum. “So we can confidentially communicate with them and inform that they should take a look at this.”

Officials said if this first mailing is a success, they plan to send similar letters to the rest of the estimated 66,000 small businesses inMaryland that would be eligible for tax credits. But first, they wanted to test the strategy in Howard County, said Vincent DeMarco, president of the Maryland Health Care for All Coalition.

There are about 18,000 uninsured Howard residents.

Howard County is home to a growing number of startup companies, so there’s a captive audience for information about employee management, Brooke said.

“[My two employees and I] are self-insured, but I would like to create an employer-based program,” Brooke said. “If HowardCounty is generating a lot of small businesses like myself, knowing about this tax credit will be helpful in planning for that when we’re starting off.”

Theo Bell, managing partner of Washington, D.C-based Epic Consulting, said he attended Monday’s forum for that very reason. His firm, which works with real estate companies, just started out, but Bell plans to hire his first five to seven employees next year. He said he “absolutely” would take advantage of the health insurance tax credit, but needs to learn more about it.

“You definitely want to strategize in your hires and make sure you understand that if you gain an employee, it changes the game,” he said. “You definitely have to look at every hire, at everything you do as far as your growth strategy.”

Bell said he’s heard a lot of business owners say they’re wrestling with the “employer mandate” — a provision of the Affordable Care Act that requires companies with 50 or more full-time employees to provide health insurance. Bell said the provision is a disincentive to hire more workers.

“Most of the business community feels that this is going to impact business negatively,” he said. “So I wanted to come out and learn if that’s going to be the case. …I’m still on the fence. I need to figure out how it’s all going to work and get some of my questions answered.”

Last modified: July 23, 2013