IRS Closes Health Insurance Loophole
Posted on May 26th, 2014 in General Interest
The Affordable Care Act, (Obama Care) requires certain “large employers to provide health insurance to full-time workers or else face fines / penalties. After the Affordable Care Act was passed into law many employers thought they would give their employees a tax free cash contribution to offset insurance costs and let their employees go purchase an insurance plan from one of the public insurance exchanges. That plan is now unfeasible after the IRS ruled that such arrangements to transfer employees the public exchanges do not satisfy the requirement to offer health insurance and would result in fines / penalties. The IRS ruling allows for a fine of $100 per day per each shifted employee (or $36,500 per year per shifted employee). Employers could pay employees higher “ordinary” wages to help offset a health care plan but that actions would result in higher taxes for both employer and employee.
For more information on the Affordable Care Act please go to: http://www.irs.gov/uac/Newsroom/Employer-Health-Care-Arrangements