The Internal Revenue Service (IRS) plans to fine companies $36,500 per employee per year if the companies give their workers money to help them buy health insurance plans rather than directly providing health insurance coverage for the workers.
“Under IRS Notice 2013-54, such arrangements are described as employer payment plans,” according to a Q+A posted to the IRS website. “An employer payment plan, as the term is used in this notice, generally does not include an arrangement under which an employee may have an after-tax amount applied toward health coverage or take that amount in cash compensation.”
Note the terminology: “after-tax amount.” The IRS doesn’t like after-tax amounts being applied to things.
“Notice 2013-54 clarifies that such arrangements cannot be integrated with individual policies to satisfy the market reforms. Consequently, such an arrangement fails to satisfy the market reforms,” according to the IRS.
Obamacare’s employer mandate penalty, a $100 per day excise tax that comes out to $36,500 per employee per year, applies to companies that do not provide health coverage for their workers. Companies that give money to workers to buy their own plans, we now know, also count as Obamacare delinquents.
So if you’re an employer with more than 50 employees, make sure not to give your workers any money to help them buy private insurance plans that might be cheaper than Obamacare plans. You’ll be fined if you do.