rr-10-13.pdf

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# Part I

Section 45R-Average premium for small group market for determining the small
employer health insurance credit

(Also Section 38(b))

## Rev. Rul. 2010-13

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

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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

5,355

12,823

Columbia

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

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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

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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

# DRAFTING INFORMATION

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).