Section 45R — Average premium for small group market for determining the small employer health insurance credit. Section 45R provides a federal income tax credit to eligible small employers, including tax-exempt organizations, that make nonelective contributions towards their employees’ health insurance premiums under an arrangement that meets certain requirements. The amount of an employer’s premiums that are taken into consideration for purposes of calculating the credit cannot exceed the average premium for the small group market in the state in which the employer offers coverage. This ruling publishes the average premium rates for the small group market. These rates are determined by the Department of Health and Human Services.
Section 45R was added to the Internal Revenue Code by section 1421 of the Patient Protection and Affordable Care Act (the Affordable Care Act), Pub. L. No. 111-148. The Affordable Care Act was signed by the President on March 23, 2010. Section 45R is effective for taxable years beginning after December 31, 2009.
Section 45R provides a Federal income tax credit to eligible small employers, including tax-exempt organizations, that make nonelective 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 nonelective contributions paid by the eligible small employer on behalf of employees under the arrangement during the taxable year, and 2) the amount of nonelective 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. The Secretary of Health and Human Services (HHS) determines whether separate average premiums will apply for areas within a State (“sub-State areas”) and also determines the average premium for a State or sub-State area. The chart below sets forth the average premium for the small group market in each State for the 2010 taxable year, as determined by HHS.
HHS recognizes that there may be areas in some States with meaningfully higher premium rates. For the 2010 taxable year, HHS may provide additional average premium rates for the small group market in certain areas within States. However, in no case will any such additional sub-State rates be lower than the applicable rate for each State that is set forth in this Revenue Ruling.
The following chart sets forth the average premium for the small group market in each State for the 2010 taxable year. Family coverage includes any coverage other than employee-only (or single) coverage.
| State | Employee-only Coverage | Family Coverage |
|---|---|---|
| Alaska | $ 6,204 | $ 13,723 |
| Alabama | 4,441 | 11,275 |
| Arkansas | 4,329 | 9,677 |
| Arizona | 4,495 | 10,239 |
| California | 4,628 | 10,957 |
| Colorado | 4,972 | 11,437 |
| Connecticut | 5,419 | 13,484 |
| District of Columbia | 5,355 | 12,823 |
| Delaware | 5,602 | 12,513 |
| Florida | 5,161 | 12,453 |
| Georgia | 4,612 | 10,598 |
| Hawaii | 4,228 | 10,508 |
| Iowa | 4,652 | 10,503 |
| Idaho | 4,215 | 9,365 |
| Illinois | 5,198 | 12,309 |
| Indiana | 4,775 | 11,222 |
| Kansas | 4,603 | 11,462 |
| Kentucky | 4,287 | 10,434 |
| Louisiana | 4,829 | 11,074 |
| Massachusetts | 5,700 | 14,138 |
| Maryland | 4,837 | 11,939 |
| Maine | 5,215 | 11,887 |
| Michigan | 5,098 | 12,364 |
| Minnesota | 4,704 | 11,938 |
| Missouri | 4,663 | 10,681 |
| Mississippi | 4,533 | 10,501 |
| Montana | 4,772 | 10,212 |
| North Carolina | 4,920 | 11,583 |
| North Dakota | 4,469 | 10,506 |
| Nebraska | 4,715 | 11,169 |
| New Hampshire | 5,519 | 13,624 |
| New Jersey | 5,607 | 13,521 |
| New Mexico | 4,754 | 11,404 |
| Nevada | 4,553 | 10,297 |
| New York | 5,442 | 12,867 |
| Ohio | 4,667 | 11,293 |
| Oklahoma | 4,838 | 11,002 |
| Oregon | 4,681 | 10,890 |
| Pennsylvania | 5,039 | 12,471 |
| Rhode Island | 5,887 | 13,786 |
| South Carolina | 4,899 | 11,780 |
| South Dakota | 4,497 | 11,483 |
| Tennessee | 4,611 | 10,369 |
| Texas | 5,140 | 11,972 |
| Utah | 4,238 | 10,935 |
| Virginia | 4,890 | 11,338 |
| Vermont | 5,244 | 11,748 |
| Washington | 4,543 | 10,725 |
| Wisconsin | 5,222 | 12,819 |
| West Virginia | 4,986 | 11,611 |
| Wyoming | 5,266 | 12,163 |
The principal author of this revenue ruling is Mireille Khoury of the Office of the Division Counsel/Associate Chief Counsel (Tax Exempt & Government Entities). For further information regarding this revenue ruling, contact Mireille Khoury at (202) 622-6080 (not a toll-free call). For questions regarding the data contained in the table of average State premiums, contact Tara Oakman of the Department of Health and Human Services at (202) 690-6870 (not a toll-free call).
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