Home > Obamacare > Employers must advertise Obamacare exchanges by Oct 1 or face fines

Employers must advertise Obamacare exchanges by Oct 1 or face fines

September 11, 2013
Pile of Stones by Petr Kratochvil

Pile of Stones by Petr Kratochvil

Politicians in DC appear to love adding extra regulatory requirements to small business owners. Obamacare is no exception. A part of Obamacare is the requirement that employers with at least 1 employee and $500,000 in annual revenue (companies with smaller revenue still may apply) must provide a letter to all employees notifying them of the healthcare exchanges. I have provided some basic info on the requirement over at the TNT Accounting Blog. Employers that do not comply with this requirement can face up to $100 per day fine for non-compliance of the law.

I knew of this requirement and assumed it was extended along with President Obama’s illegal extension of the employer mandate. I was wrong. As Fox Business reports:

Earlier this summer, the employer mandate, which states that every business with at least 50 or more full-time employees must offer workers acceptable coverage or face a $2,000 penalty per-worker, per-year, was pushed back until 2015. But the Oct. 1 employee-notification deadline stands. Keith McMurdy, partner at FOX Rothschild LLP, says the $100 per-day fine has been “unfortunately overlooked” by many small businesses, and the dollar amount on the penalty comes from the general per-day penalty under the ACA.

I disagree with “unfortunately overlooked” statement in the above story. Most employers do not know this requirement even existed. Even those that knew about the provision assumed it had been extended a year by Obama. So what does the Obama administration say to assist small business owners in this time of confusion? This from the same article:

The White House declined to comment on how the fine would be implemented, but deferred to the U.S. Small Business Administration, which says education on this FLSA requirement has been part of “any and all outreach that SBA does with small business owners.” The agency says it has participated in more than 750 ACA-related events with more than 30,000 small business owners and community stakeholders since February 2013.

So, if a small business owner happens to have attended one of these SBA events they should know about it. The problem is the SBA only deals with a small portion of business owners. At its core, the purpose of the SBA is to provide loans to risky business plans. The average business owner has no dealings with the SBA. Since the White House is shuffling this issue over the SBA, is that where fines will come from? Will the IRS work with the SBA to determine who gets the fine and how much that fine should be?

Actually the worse part of this situation is that the architects of Obamacare are using the resources of small business owners to advertise Obamacare. Getting people information about the Obamacare exchanges is the root purpose of this regulation. These Obamacare architects have no problems using the scarce resources of small business owners to actually push people to the exchanges.

I’ve already heard this employer requirement is “minimal”. Minimal? Anyone saying that is out of touch with the average small business owner. The average small business owner is already overwhelmed trying to keep up with relevant regulations. Each of the already-in-place regulations are also called ‘minimal’. However when many ‘minimal’ regulations are added together it can become quite overwhelming to a business owner. I would also disagree that this requirement is minimal. Time and possibly money must be spent by small business owners to determine if this requirement applies to them. For businesses this does apply to, the owner must then decide how to implement the notices and how prove they have done so.

Thanks to articles, such as the one from Fox Business, we have been getting questions about this new requirement in our office. Many of these questions have no guidance provided for by the IRS, DOL, or SBA. Does this requirement apply to 1040 Schedule F farmers? Does this requirement apply to family members that already fall under the owners personal insurance plan? If the SSA makes a company change an employee from a 1099 to a W-2 employee does that backdate a fine for non-compliance with ACA? These are among the questions I’ve heard today.

Going forward I hope Congress finds a way to repeal some or all of the Obamacare provisions. A good starting point would be for Congress to repeal this employer requirement that is causing more confusion for small business owners. Or maybe Obama can extend this requirement for a  year as he did with the employer mandate. Either way I recommend all business owners to look at the requirements and notify their employees accordingly. If they don’t it might hit the pocketbook pretty hard.

Categories: Obamacare Tags: , ,
%d bloggers like this: