Not Providing Health Care to Employees? IRS is Taking Note


Under the employer shared responsibility requirement, employers are required to offer affordable health coverage to their full-time employees. Those employers who shirk their duty will get the reminder from the IRS about payments due in 2015.

What does the law say?
Under the individual mandate, or the "shared responsibility requirement," an employer sponsors health insurance on behalf of their employees as part of an employee benefit package. Employers who have a shared responsibility payment under 4980H and have not been paying for health care of their employees might be assessed a penalty by the IRS. It is only in cases where the assessment leads to the evidence of non-compliance that the IRS may act.

Employers have the right to dispute IRS’ claims and explain their stance. In some cases, the shared responsibility payment assessments by the IRS may be wrong, and can be appealed against by taxpayers.


How the IRS works it out?
The IRS assesses non-compliance based on many factors including the information obtained from employers’ insurers, the Department of Health and Human Sciences, and other sources the IRS has access to. On the basis of this information, the IRS gathers proof of non-compliance and then proceeds to contact the employer.

Conditions:
From Jan 1, 2014, employers that employ 50 or more full-time employees, or a combination of full-time and part-time employees that is equal to at least 50 full-time employees, will be subject to the employer shared responsibility provisions under section 4980H of the IRS code.

According to the law, a full-time employee is one who works at least 30 hours a week on an average.

Employers may assess their tax responsibility because the IRS will take note of those who do not comply with the new healthcare rules. Prepare yourself before the IRS does.

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