State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
A business with 25 or fewer employees may qualify for a federal premium tax credit only if the coverage is purchased through:
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Small businesses with 25 or fewer employees may be eligible for the federal small employer health insurance premium tax credit, but only if they purchase coverage through the Covered California for Small Business (CCSB) program. The CCSB is California's small business health options exchange. This credit is designed to make group coverage more affordable for very small employers, but the tax-advantaged purchase route runs through CCSB, not through an ordinary private sale.
Why the other options are wrong
- A) Purchasing through any licensed agent does not qualify the employer for the federal tax credit; the purchase must go through CCSB.
- B) Self-insured association trusts are subject to separate California rules and do not qualify for the CCSB tax credit path.
- C) Medicare is a federal program for seniors and disabled individuals; it has no role in employer premium tax credits for small businesses.
Memory hook
25 employees or fewer, buy via CCSB, get a federal tax credit. Skip CCSB and the credit walks away.