As of July 1st, any small business that attempts to help its employees with healthcare costs will be penalized by the IRS. The National Federation of Independent Business (NFIB) recently issued a statement saying that the IRS will penalize any small business that financially assists employees buying insurance or paying for medical bills. That is, the IRS will fine small businesses, who assist employees with healthcare costs, up to 18 times more than businesses that do not offer any healthcare coverage.
For example, certain small business currently compensates employees for purchasing their company sponsored health insurance plan. The IRS’s new regulation will result in these small businesses being being fined a penalty of $100 per employee every day. In addition to this, any small business that fails to comply with the new mandate will be fined $2,000.
The IRS has developed this regulation, officially referred to as IRS issued Notice 2015-17, independently of Obamacare, which is designed to make healthcare more affordable for more Americans. According to NFIB, 14 percent of small businesses are currently financially assisting their employees with healthcare costs.
In response to small business concerns, Rep. Charles Boustany has introduced legislation (H.R. 2911) in the House and Sen. Charles Grassley has introduced legislation (S.1697) in the in the Senate to remedy the problem.
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Law Offices of Darrin T. Mish, P.A.: Tax Attorney