State average premiums for the small group market

Small Business Majority and Families USA conducted economic research that found more than 3.2 million small businesses (70% of businesses with fewer than 25 workers) were eligible for tax credits to help with the cost of health insurance coverage for their workers for the 2011 tax year. To qualify, a small business must:

  • Have fewer than 25 full-time equivalent employees
  • Pay average annual wages below $50,000 per FTE
  • Contribute at least 50% of each employee’s premium

An employer’s eligible premium contribution is capped at the average cost of health insurance for the small group market in their state (or an area of the state). If an employer pays 80% of the premium, then the amount that counts is limited to the same portion—80% of the average cost of health insurance in the state.

The average premium for the small group market is determined by the Department of Health and Human Services (HHS). After HHS sets the rate for a state (or within a state) it is published on the IRS website (IRS.gov). The 2012 rates have recently been posted online and are available below:

STATE SINGLE (EMPLOYEE-ONLY) COVERAGE FAMILY 
COVERAGE
Alabama $5,084 $12,727
Alaska 7,321 15,774
Arizona 4,864 11,864
Arkansas 4,460 10,244
California 4,999 12,161
Colorado 5,308 13,014
Connecticut 5,955 15,273
Delaware 6,272 14,354
District of Columbia 6,017 15,140
Florida 5,462 13,013
Georgia 5,481 12,206
Hawaii 4,938 12,270
Idaho 4,690 10,427
Illinois 5,760 14,125
Indiana 5,414 12,386
Iowa 4,818 11,531
Kansas 4,959 12,163
Kentucky 4,660 11,387
Louisiana 5,300 12,446
Maine 5,413 12,837
Maryland 5,289 13,188
Massachusetts 6,110 16,269
Michigan 5,334 12,936
Minnesota 5,360 13,589
Mississippi 4,997 11,667
Missouri 5,089 11,975
Montana 5,148 11,197
Nebraska 5,325 12,511
Nevada 5,028 11,793
New Hampshire 6,030 15,026
New Jersey 6,063 14,470
New Mexico 5,527 12,909
New York 5,849 14,688
North Carolina 5,352 12,251
North Dakota 4,806 11,939
Ohio 4,987 12,143
Oklahoma 5,042 11,836
Oregon 5,130 12,197
Pennsylvania 5,400 13,357
Rhode Island 6,151 14,959
South Carolina 5,244 12,243
South Dakota 5,037 12,136
Tennessee 5,113 11,520
Texas 5,222 12,803
Utah 4,744 12,072
Vermont 5,678 13,099
Virginia 5,263 12,884
Washington 4,904 11,703
West Virginia 5,679 13,112
Wisconsin 5,575 14,387
Wyoming 5,657 13,688

Source: Internal Revenue Service (http://www.irs.gov/instructions/i8941/ar02.html#d0e517)