Employers without SHOP marketplace plans receive health insurance credit relief

The IRS has provided guidance which allows certain small employers to claim the small business health care tax credit under Code Sec. 45R in situations in which no Small Business Health Options Program (SHOP) marketplace plans are offered in the county where the employer is located. Although the credit requires that the employer offer qualified health plans through the SHOP marketplace numerous counties no longer provides SHOP marketplace plans.
This relief is only available to employers that properly claimed a credit for all or part of the 2016 tax year, or that properly claim the credit for all or part of a later tax year, but are unable to offer employees a qualified health plan through a SHOP Exchange for all or part of the remainder of the credit period because the employer’s principal business address is in a county in which a qualified health plan through a SHOP Exchange is not available.
Small employers may only claim the credit for two consecutive years. The relief allows qualifying employers to claim the credit for the period in which there is no available SHOP marketplace coverage if the non-SHOP coverage qualifies for the credit under rules that were applicable before January 1, 2014 when SHOP marketplace plans were generally unavailable.
The guidance separately provides that Hawaii employers may not claim the credit for plan years beginning during 2017 — 2021 as the result of approval of Hawaii’s application for a 5-year State Innovation Waiver.
The guidance is effective as of April 27, 2018 and applies to periods after December 31, 2016.

SOURCE: IR-2018-108, April 27, 2018.
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