IRS Will Levy Fines Against Employers Shifting Workers to Exchanges: Large employers that decide to shift workers into the Affordable Care Acts exchanges with a tax-free cash contribution to offset the premiums of that coverage could face a daily tax penalty for each worker, according to guidelines in a new question-and-answer document released by the Internal Revenue Service, the New York Times reports. Under the ACA, most employers are required to offer affordable health coverage options to all full-time workers or face penalties under the laws employer mandate. According to the Times, some employers have determined that it would be more cost effective to provide non-taxable contributions to purchase private coverage instead of offering employer-sponsored coverage. However, the IRS noted that such an arrangement does not comply with the ACAs requirements and that employers could face a tax penalty of $100 per day, or about $36,500 per year, for each employee who is directed to purchase coverage through an exchange. Specifically,the IRS said that employer payment plans -- in which employers reimburse employees for premiums -- are considered to be group health plans. Such plans are insufficient under the ACA because they do not meet the laws provisions prohibiting insurers from capping benefits and requiring that they provide certain preventive services without co-payments.
Posted on: Tue, 27 May 2014 18:38:17 +0000
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