A tax credit for small companies that offer health insurance comes at a price. Currently, companies with 10 or fewer full time equivalent employees with average wages under $25,000 can claim a tax credit for 35% of the lesser amount of what the employer paid for employee health care coverage. BUT, the deductions for health care premiums are reduced by the credit. The tax credit percentage falls rapidly for employers with more employees with higher pay levels, and no credit is allowed for companies that employ more than 25 full time equivalent workers or have an average annual pay of $50,000 or more. Check with your CPA regarding further provisions of this tax credit.