While most of what we know about the impact the Affordable Care Act will have on small businesses is related to tax changes and the insurance marketplaces there is another surprise for us.
The practice many small businesses owners have of reimbursing certain employees for their cost of purchasing insurance is all but eliminated.
IRS Notice 2013-54 leads us to the conclusion that these arrangements will now trigger a potential penalty of $100 per day. The problem arises due to the nature and type of the individual policy as the ACA requires no dollar limits on essential health benefits and no-cost preventative care. If your employee’s policy does not, in combination with your reimbursement arrangement, meet these requirements then your on the hook for some huge penalties.
Should you have such an arrangement in your business, contact us today so we can help you eliminate the potential risk of being assessed these ridiculous penalties.