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Small Businesses That Assist Employees With Health Costs Could Face a Hefty Penalty

Amber Yates

July 17, 2015

Small employers who are not applicable large employers (less than 50 employees) should be aware that they could be subject to a $100 penalty per day, per employee if they reimburse or pay a premium for an individual health policy for its employees.  Transition relief from the excise tax ended July 1.

The tax relief was originally put in place to assist small businesses in their compliance of the market reforms required by the ACA.  On June 30, 2015 the assistance ended, leaving any employers who reimburse employees, or offer employer payment plans for individual health policy premiums subject to $100 per day excise tax.  If an employer arrangement falls under the previously stated situations it is then considered to be a group health plan, thus making it subject to the excise tax.

There are very few employee exclusions that employers may utilize to avoid the penalty, although S-Corporations are exempt through the remainder of 2015. 

You can read more at http://www.marketwatch.com/story/what-changes-to-obamacare-could-mean-for-small-business-taxes-2015-06-16 or at http://www.nfib.com/article/suranc-69940/. If you have any questions please do not hesitate to contact the office at 541.388.7888.


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