Skip to comments.IRS Warns Employers: Do Not Try to Avoid ObamaCare Insurance Mandate
Posted on 01/13/2013 5:18:13 AM PST by IbJensen
(CNSNews.com) The Internal Revenue Service warned employers in a new regulatory proposal not to come up with clever schemes to avoid Obamacares employer health insurance mandate.
The IRS said it would soon issue anti-abuse rules to discourage employers from taking advantage of any regulatory loopholes.
The Treasury Department and the IRS are aware of various structures being considered under which employers might use temporary staffing agencies (or other staffing agencies) to evade application of section 4980H [the employer insurance mandate], the IRS said in a proposed regulatory announcement issued December 28.
The IRS said it would issue a so-called anti-abuse rule in an attempt to prevent employers from using temp agencies to circumvent the mandate, essentially writing into law that even though an employer hires temporary workers and therefore is not technically under the mandates jurisdiction, the IRS would fine them anyway for not providing health insurance.
It is anticipated that the final regulations will contain an anti-abuse rule, the agency said. Under that anticipated rule, if an individual performs services as an employee of an employer, and also performs the same or similar services for that employer in the individuals purported employment at a temporary staffing agency or other staffing agency of which the employer is a client, then all the hours of service are attributed to the employer for purposes of applying section 4980H.
In other words, if an employer hires someone part-time, then uses an employment agency to bring the same person on for a second part-time shift, the IRS will still hold the employer liable under the ObamaCare mandate.
Similarly, IRS said that if an employer hires the same person for two part-time stints by using two different employment agencies, it will hold either the employer or one of the employment agencies liable for the mandates penalties.
The issue stems from the employer health insurance mandate in Obamacare, which requires employers with 50 or more full-time employees to provide government-approved, affordable health insurance to at least 95 percent of their employees (and dependents).
If any of those employees receives government health insurance subsidies, the IRS will fine the employer up to $2,000 per employee, according to a formula outlined by the IRS.
The warning is part of proposed regulations from the IRS outlining how employers must determine whether they meet the 50 full-time-employee threshold and whether the insurance they offer meets government standards.
The IRS said that a full-time employee is one who works an average of 30 hours per week or 130 hours per month, roughly 6 hours of paid service per weekday.
The IRS also said that in order for an employers health insurance plan to pass muster with the government, it must be available to 95 percent of employees and cost no more than 9.5 percent of an employees wages.
The agency specified that employers could still fall under the mandate if they employ enough part-time workers to equal 50 full-time workers. For example, if an employer has 40 full-time workers and 20 part-time workers, that employer would be considered by the government to have 50 full-time workers and would be subject to the mandate because the 20 part-time workers average to 10 full-time workers meeting the 50 full-time-worker threshold.
Please explain that statement, especially as to why it is a low-moral decision.
It's one thing to hire many part-time people in order to comply with regulations, so you rotate many people through employment. It's another thing entirely, at least to me, to bring the same person back in under another payroll in order to avoid the tax. If that person is that good an employee and you are willing to play that game, as an employer you are not a good person.
Maybe if I used the expression "low-rent" instead of "low morals" it would have been easier to understand my intent?
I am in the IT field as a contractor.
The IRS is already looking at us to make us employees because the companies that contract with us have to much control over the when, what, where, and how of the job.
Extortion-Care. This is all about the failed bailout of 2008, thus now attempting Collateral Transformation to secure U.S. downgraded debt, and bailout favored “insurance” companies, which are really “insurance-banking” investment firms.
All on everyone else but the “Exempt Ones.”
Obama’s IRS attack dogs are baring their teeth.
They care. they all think that if they cooperate they will part of the new Nomenklatura.
Employers don’t want to pay for health insurance.
In the end, the government will take over a la single payer.
ObamaCare was never intended as anything more than a rest stop enroute to the final destination - government-run health care.
So trying to avoid a tax is low-moral or low-rent? An employee can be held in high regard but it does not follow that high regard will justify paying the employee more. Pay is typically based on the amount of profit an employee helps produce. A tax is simply an added cost that an employee will have to cover in their worth to an employer.
As to trying to get around this idiotic tax on employment by structing one job into two different employers, it may be better for the employee than having to work at two different places.
If the customer will not buy said company’s products because the price is too high than the employee is not needed. But if the price can be lowered by structuring the one job into two and thereby avoiding a tax, the price can be lowered and the job retained.
I’m sad to say that I can’t disagree with something like that happening. At this point, all bets are off. (I expect the 3rd Amendment to be violated not by quartering soldiers, but illegal aliens. We would be “sponsors” & it would called “our civic duty”.)
Yep. I don’t understand why more people are not clamoring for secession. It will be virtually impossible to reverse the damage 0bama & the democrats have done for the past 5 years.