RUSH: Wait until you hear this next story. It is from Forbes. Here’s the headline: “Small Businesses Threatened with $36,500 IRS Fines For Helping Employees with Health Costs.” This was not and is not part of Obamacare. The IRS just created this, and that’s one of the problems with Obamacare. Obamacare is open ended. The secretary of Health and Human Services can invent regulations. The IRS can invent new tax rules and regulations, and they’ve just done it.
This provision was never voted on by anybody in Congress.
“Small businesses that reimburse employees for the cost of premiums for individual health insurance policies or pay their health costs directly will be fined up to $36,500 a year per employee under a new Internal Revenue Service regulation that [took] effect July 1, 2015. According to the notice, an employer arrangement that reimburses or pays for employee individual health premiums is considered to be a group health plan that is subject to the $100 per-employee per-day penalty.
“The penalty applies whether the reimbursement is considered a before-tax or after-tax contribution. ‘It’s the biggest penalty no one is talking about,’ said Kevin Kuhlman, policy director for the National Association of Independent Business. ‘The penalty for compensating employees for health care-related expenses is enough to destroy most small businesses.’ You can read more in this NFIB post, ‘No Kidding: This Week IRS starts Punishing Businesses for Helping Workers Buy Insurance.’
“The new IRS penalty is more than 18 times greater than the $2,000 employer-mandate penalty under Obamacare for not providing qualifying health insurance for employees. And employers with fewer than 50 workers are not exempt, as they are from the employer-mandate penalty.” The only businesses that are exempt are those three years in existence and younger. “The rule appears nowhere in the Affordable Care Act…” It appears nowhere in the statute. It appears nowhere in Obamacare.
It “was developed by the Obama administration’s regulation writers at the IRS. The rule punishes small businesses for providing the only health insurance support many can afford — a contribution to help employees pay premiums for their individual or family health insurance policies or to help finance direct payment for medical services. ‘Reimbursing employees for the cost of insurance or medical services is a way for small businesses to help their workers without the administrative headaches of setting up a costly group plan,’ Kuhlman said.
“‘Most small employers don’t have [Human Resources] departments or benefits specialists, so this is a simpler, easier way to help their employees.’ No more, says the IRS. If you take the ‘simpler, easier’ route that you can afford, the IRS will slap you with $100-a-day, per-employee fines until you stop. Rep. Charles Boustany has introduced legislation in the House (HR 2911) and Sen. Charles Grassley, in the Senate (S.1697) to remedy the problem. … ‘If there’s an opportunity for a bipartisan improvement toward affordable health care, this has to be it,’ said Kuhlman.
“‘There’s no real justification for penalizing small businesses that do what the law’s strongest supporters claim to want, which is to help employees obtain coverage or pay medical bills.’ … The rule covers employers with more than one employee participating in an employer health care/coverage payment arrangement. Employers can exclude workers who 1) have fewer than three years of service to the company; 2) are under age 25; and 3) are part-time or seasonal employees.”
Well, you know what this is going to do.
People are going to start getting fired after three years and converting to part-time workers to avoid yet another government penalty or fine imposed upon them by Obamacare. What’s this? Here you have Obama and the rest of the Democrat Party claiming that all they want is for people to get insured who don’t have insurance. They just want people to get covered and they want people to get treatment, and they don’t want it to cost an arm and a leg.
Well, a lot of small businesses can’t afford to do it, but they like their employees. They like having them. They’re not able to pay their employees enough where they can on their own go out and buy health insurance. So they try to help supplement the purchase of a plan, help out on the premium or help on the deductible. And if they do that — if a penny of assistance is offered an employee by a small business — that small business can be fined up to 36 grand, and in some cases that’s gonna be more than what they pay some part-timers.
And it’s not even part of Obamacare!
The IRS just wrote it!
Well, it says “the IRS.” Look, this comes from the White House, as all this crap does. And they implement this on July 1st and it goes all the way through the holiday weekend without anybody knowing anything about it. I don’t know how many of you own small businesses, but I know that many of you who do really value the people that work for you. They get paid first. You try to do as well by them as you can in this economy.
The cost of health insurance is skyrocketing, and you can’t afford it for yourself much less all your employees. So you come up with ways to do it as best you can, and if that involves helping somebody pay a premium, you do it. Like, let’s say their premium is two grand a year. You bump them 500 bucks or so just to help them out. Anything to avoid a formal plan and all that, and all the administrative headaches and costs that come with that, because you don’t have a department set up to handle that kind of stuff.
The IRS says, “No, you can’t do it.” This, to me, is outrageous. What’s the difference between this…? What if you have an employee, a really valued employee who has run into some tough times in life and is in debt, credit card debt and so forth? What if you like the employee so much, you try to help out? You know, an advance on a salary here. Maybe a bonus or what have you. These things happen all the time. What if they get to the point where you can’t even do that? What if it’s not about health care?
You can’t even do that because here comes the IRS. “No, there are tax consequences to your assistance. Is this a gift or is this an additional payment.” In this case this is not charity, these are people that are actually employed. But the big thing here is you talk about good intentions, small businesses, good intentions, trying to help their employees get the headache and the stress of healthcare off their minds so they can focus on work and here comes the IRS saying no you can’t help them. No, you can’t be charitable. No, you can’t do this. We’re going to fine you.
So 100 bucks a day up to a maximum of $36,500 a year, per employee. But you can get out of it. If you have part time employees, you can help them out all you want. If you have people working for you less than three years, you can help them all you want. But people who have been with you a long time, lots of service, a lot of loyalty, encounter some hard times, and hard times, by the way, you can be trucking along just fine and then here comes the mandates of Obamacare. And that could be all it takes to ruin somebody’s financial future.
I don’t know how common it is for small businesses to help employees. It’s probably rare in major large business, corporate settings. Small business probably a little more frequent. But now it’s a crime, as of July 1st. It’s not in Obamacare. It’s not in the law. It’s another example of a department, in this case the IRS. It could be the EPA tomorrow. It could be health and human services the next day. It could be Homeland security. Hey, let’s just write a new law here. They’ve got the power to write a new regulation without Congress being involved. The elected representative, the people not being involved. No vote, no nothing, no presidential signature. Just we’re going to do this. And there’s no stopping it.
But I found this one just — talk about mean. You know, I listen to Millennials talk, low information people, people that vote for Democrats. It does come down to who they think is mean and who is nice. They think the Democrats are nice guys. They think the Democrats are nice guys. the Democrats care about the little guys. Republicans are mean. They only care about the rich and War on Women and all this stuff. Well, this is mean. This is just flat out mean. The government itself creates mandates on citizens that they have to buy this healthcare stuff and the costs skyrocket, but they have to buy it. That’s mean. And then here comes an employer who wants to help out now and then, occasionally, that’s nice too. But that’s now a crime. And who is doing all this? It’s Democrats doing all this. Democrats and the Obama Administration. Democrats at the IRS.