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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Employment Law
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Experience:  20+ Years of Employment Law Experience
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39;s answer contradicts another opinion that said since we

Customer Question

John's answer contradicts another opinion that said since we have fewer than 20 employees we could not pay secondary insurance cost or we'd be fined up $100 per day for doing so.
Submitted: 1 year ago.
Category: Employment Law
Expert:  Law Educator, Esq. replied 1 year ago.
Employers who reimburse employees for individual non-group health plans face a $100 a day or $36,500 per year, per employee excise tax. This rule applies to all employers, but the fine itself is only levied on those who have to comply with ObamaCare’s mandate (firms with 50 or more full-time equivalent employees).
26 USC 4980D has an exemption which states in pertinent part:
"(d) Tax not to apply to certain insured small employer plans
(1) In general
In the case of a group health plan of a small employer which provides health insurance coverage solely through a contract with a health insurance issuer, no tax shall be imposed by this section on the employer on any failure (other than a failure attributable to section 9811) which is solely because of the health insurance coverage offered by such issuer.
(2) Small employer
(A) In general
For purposes of paragraph (1), the term “small employer” means, with respect to a calendar year and a plan year, an employer who employed an average of at least 2 but not more than 50 employees on business days during the preceding calendar year and who employs at least 2 employees on the first day of the plan year. For purposes of the preceding sentence, all persons treated as a single employer under subsection (b), (c), (m), or (o) of section 414 shall be treated as one employer."
However, that is what the Affordable Care Act states, but the IRS states that regardless the size of the employer for paying medicare premiums after June 2015, the penalty would apply to ALL employers UNLESS your plan meets the following criteria:
unless the employer payment plan is integrated with a group health plan. A reimbursement program will be considered integrated if:
1) The employer offered a group health plan to the employee that offers minimum value (a plan with at least 60% actuarial value that covers physician and hospital care), even if the Medicare-eligible employee declined it;
2) The employee who receives premium payments is actually enrolled in Medicare Parts A and B;
3) The program provides that premium payments are only available to employees who are enrolled in Medicare Part A and either Part B or D; and
4) Premium payment or reimbursement is only for Medicare Part B or D premiums and excepted benefits, including Medigap premiums.