Landmark Tax Group

Employers and the Affordable Care Act

What Businesses Need to Know About the Affordable Care Act (“Obamacare”)

The Affordable Care Act (ACA) includes several provisions that may affect you as an employer and business owner, including the shared responsibility provisions, also known as the “employer mandate.” Under the employer mandate, which is effective January 1, 2015, a penalty is imposed on certain large employers that do not offer health insurance coverage, offer health insurance coverage that is unaffordable, or offer health insurance coverage that consists of a plan under which the plan’s share of the total allowed cost of benefits is less than 60 percent. Under current legislation, the IRS will not be allowed to collect this penalty from you via a bank levy or garnishment. The IRS can, however, collect the outstanding penalty by taking your refund.

It is important to note that this provision only applies to an employer who employed an average of at least 50 full-time employees on business days in the preceding calendar year. Additionally, subject to certain requirements, no employer shared responsibility payments will apply during 2015 for employers with fewer than 100 full-time employees.

The penalty is assessed for any month in which a full-time employee is certified to the employer as having purchased health insurance through an Exchange with respect to which a premium tax credit or cost-sharing reduction is allowed or paid to the employee. However, it is worth noting that currently there are multiple ongoing court battles over whether insurance purchased on a federally established Exchange qualifies for the subsidies, which then triggers the tax on the employer. The issue will most likely not be resolved until sometime later next year.

See: 6 Ways to Reduce Your Chance of an IRS Audit

See: What Are My IRS Taxpayer Rights?

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For help with the Affordable Care Act (Obamacare), or another IRS matter, contact us now at 1-714-382-6780 for a FREE consultation with our CPAs and former IRS Agents.   



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