The new ruling under
Code 4980D that went into effect on July 1, 2015 could put many small business owners at risk for a huge IRS
you an employer or do you have a client who does not offer group insurance
coverage, but instead pays their employees extra to help them pay for their
individual insurance? If you do, it could mean
risking a $100 per-day per-employee penalty.
This affects many small business owners, including
those with as few as two employees.
According to CPA
Magazine, the National Federation of Independent Business has been watching
this penalty closely since it will likely affect many small businesses across
In a recent article
in CPA Magazine written by Jerry
Love, the NFIB warns small business owners.
“It’s the biggest
penalty that no one is talking about,” said NFIB Policy Director Kevin Kuhlman.
“The penalty for compensating employees for healthcare related expenses is
enough to destroy most small businesses.” (CPA Magazine)
While this ruling
went into effect over seven months ago, there are still small businesses not
offering group insurance, but reimbursing their employees instead. This
is a slippery slope for employers who think they are doing something good for
their employees since they are putting themselves at risk for a $100 per-day,
Make sure you
know the best options to steer clear of this penalty while providing employee benefit options. BASE® offers a
Section 105 HRA or an Integrated HRA to employers who want to reduce the
overall cost of an insurance plan and decrease the impact of health care
expenses. Most importantly, have peace of mind in
knowing you have an administrator keeping you in compliance so that you don’t
have to worry about any big penalties issued by the IRS.
To see what businesses qualify for
these products, call 1-888-386-9680 or contact BASE® today.