Many employers had thought they could shift health costs to the government by sending their employees to a health insurance exchange with a tax-free contribution of cash to help pay premiums, but the Obama administration has squelched the idea in a new ruling.
. . .
Such arrangements do not satisfy the health care law, the administration said, and employers may be subject to a tax penalty of $100 a day — or $36,500 a year — for each employee who goes into the individual marketplace.
Source (Emphasis added)
Christopher E. Condeluci, a former tax and benefits counsel to the Senate Finance Committee, said the ruling was significant because it made clear that “an employee cannot use tax-free contributions from an employer to purchase an insurance policy sold in the individual health insurance market, inside or outside an exchange.”
If an employer wants to help employees buy insurance on their own, Mr. Condeluci said, it can give them higher pay, in the form of taxable wages. But in such cases, he said, the employer and the employee would owe payroll taxes on those wages, and the change could be viewed by workers as reducing a valuable benefit.
The health law, known as the Affordable Care Act, builds on the current system of employer-based health insurance. The administration, like many in Congress, wants employers to continue to provide coverage to workers and their families.
“I don’t think that an employer-based system is going to be, or should be, replaced anytime soon,” President Obama said recently, when asked if the law might speed the erosion of employer-sponsored insurance.
When employers provide coverage, their contributions, averaging more than $5,000 a year per employee, are not counted as taxable income to workers. But the Internal Revenue Service said employers could not meet their obligations under the health care law by simply reimbursing employees for some or all of their premium costs.
originally posted by: Th1nker
a reply to: links234
Anyone who says "I think single payer would be better" hasnt thought it through.. With our current system when a doctor or insurance company does you wrong you can get a lawyer an go after them.. You can also get a second independant opinion... With single payer you will have to take your dispute up with the IRS.. Good luck with that.. The government desides if you live or die and their say is final...
it wouldd be easier to fire the person istead of incurring penalties me thinks
originally posted by: Wrabbit2000
a reply to: butcherguy
I think that is a little detail the American people haven't really understood on all this yet because of all the confusion around the opening. This is a Cafeteria Plan on the full national level for enrollment "periods", which we aren't in anymore.
With that, comes a whole NEW rate sheet/data set, and as you note OH what a difference it's supposed to be, to replace the Individual Landscape set currently running healthcare.gov.
I think folks are in for a hard shock when that rate set comes public for the first time on the next enrollment period. This telling employers they'll pay $36,000 a year penalty for every employee who goes into the exchange system is chilling, but the prices they are faced with in that captive environment may be quite a thing to see too.
originally posted by: manna2
it would be easier to fire the person istead of incurring penalties me thinks