Employers Will Still Face Costly Penalties In July
The IRS and the Treasury Department announced last week that
enforcement of financial penalties on small businesses that provide so-called stand-alone Health Reimbursement Arrangements to their employees will be
delayed until July 1. A public notice from the IRS and Treasury, which said
that penalties against non-compliant small businesses will be levied starting
in July, stated, “The Departments understand that some employers that had been
offering health coverage through an employer payment plan may need additional
time to obtain group health coverage or adopt a suitable alternative.”
Employers use stand-alone HRAs to provide spending accounts workers can use to help cover
the costs of individual health plans. However, Treasury Department guidance in
the fall of 2013 declared that they do not comply with ACA insurance standards,
and employers who continue to offer them could face fines as high as $100 per
day per employee.
What This
Means For Small Business:
The announcement represents the latest in a
series of delays related to small business mandates in the ACA, including
penalties for business that do not provide adequate health insurance to their
employees, a requirement that employers report health insurance costs on
employees’ tax forms, rules requiring business owners to provide equal coverage
to all employees, and fines on plans that do not meet the law’s coverage criteria.
While the temporary
reprieve is welcome, small business owners, who will still face costly
penalties when the fines are enforced this summer, would prefer that the
mandates be repealed. Amanda Austin, NFIB vice president of public policy, said
in a statement, “This temporary delay serves as an important immediate step to
protect small businesses from costly penalties when trying to assist employees
with the purchase of health insurance. However, another delay to Obamacare does
not fix the underlying problems – which the administration is conceding with
these actions.”
Additional
Reading:
The Washington Post reports
on the delay in its “On Small Business” blog, as do Modern Healthcare, Tax-News, and California Healthline.
The new healthcare legislation, the Patient Protection and Affordable
Care Act, has left many small business owners wondering: What does this
mean for my business and what do I have to do next? NFIB has answers.
