The IRS has issued an update on employer penalties, specifically citing employers offering pre-tax monies to their workers to purchase individual insurance.

The IRS calls this an employer payment plan, and is viewed as a group health plan that does not meet the Affordable Care Act (ACA) rules.

For example, employer payment plans do not meet parts of the ACA that give workers certain preventive care benefits at no cost share. Because employer payment plans do not meet all ACA rules, employers may be taxed $100 per day for each employee this applies to. (That adds up to $36,500 per year, per worker.)

This is an excellent incentive for employers to continue to offer group employee benefits,  rather than pay their employees to get coverage.

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Jeffrey R. Ungvary


Jeffrey R. Ungvary