IRS Published Average Premiums for Use in Employer Health Care Credit

May 3, 2010 ( – Internal Revenue Service Revenue Ruling 2010-13 publishes the State average premium rates for the small group market for purposes of calculating the section 45R tax credit for small employers.

The Revenue Ruling includes a chart with the average employee-only and family coverage premiums for the small group market in each State for the 2010 taxable year. The IRS said family coverage includes any coverage other than employee-only (or single) coverage.  

Section 45R was added to the Internal Revenue Code by section 1421 of the Patient Protection and Affordable Care Act.   

Section 45R, effective for taxable years beginning after December 31, 2009, provides a Federal income tax credit to eligible small employers, including tax-exempt organizations, that make non-elective contributions towards their employees’ health insurance premiums under an arrangement that meets certain requirements. For taxable years beginning before 2014, the amount of the credit is based on a percentage of the lesser of: 1) the amount of non-elective contributions paid by the eligible small employer on behalf of employees under the arrangement during the taxable year, and 2) the amount of non-elective contributions the employer would have paid under the arrangement if each such employee were enrolled in a plan that had a premium equal to the average premium for the small group market in the State (or in an area in the State) in which the employer is offering health insurance coverage.  

Revenue Ruling 2010-13 is here.