IRS Makes It Illegal For Small Businesses to Help Employees Pay Healthcare Premiums


abolish the irs

People who support small business will find this infuriating. As of July 1st, it is a crime for small businesses to assist employees with their healthcare costs. The IRS made it illegal, obviously with the administration’s guidance.

The IRS, Obama’s weaponized government agency, has invented a new healthcare rule out of thin air.

A small business ‘helping their workers buy insurance or pay medical bills can be fined 18 times more than larger employers that don’t provide coverage at all,’ the NFIB (National Federation of Independent Business) warned.

The government is punishing companies who help out employees for making healthcare affordable for employees despite the fact that the administration said Obamacare was to help the people.

Employers who do not offer a group health plan, but give their workers additional pay to compensate for the purchase of health insurance or direct medical expenses can be fined $100 per day, per employee. Over the course of a year that’s $36,500 per employee up to $500,000 in total. The penalty on businesses for failing to comply with the employer mandate is only $2,000 per year. This is according to the NFIB.

It’s enough to drive most small businesses out of business and the fine is more than what most if not all of these part-time employees make in salary.

This rule is not in Obamacare but rather it was developed by the IRS unilaterally. This is possible because Obamacare is open-ended. It established market reform restrictions on employer-provided group health plans. After-tax employer payment arrangements are among the restrictions. (After-tax treatment means the employer payments are treated as additional taxable wages paid to participating employees.) The IRS issued IRS issued Notice 2015-17 this year which enforces it for small businesses.

Fourteen percent of small businesses are helping their employees and they think they are doing a good thing. They will be punished for it.

People who have been employed in a business for three years or less can be assisted. This encourages businesses to fire people when they hit the three year mark.

The government is here to help.

Rep. Charles Boustany has introduced legislation in the House (H.R. 2911) and Sen. Charles Grassley, in the Senate (S.1697) to remedy the problem.





    • It is on both counts.It’s a legal requirement that was thought through and a senator and a congressman have introduced legislation.

  1. This is part and parcel of ACA/Obamacare. These provisions have been known for years. The IRS was supposed to enforce this last year but enforcement was postponed. Blame the ones who passed ACA – that is solely Democrats who voted on it sight-unseen in March 2010.

  2. If Rep. Charles Boustany and Sen. Charles Grassley, can submit bills “to remedy the problem,” they can just as easily submit bills to repeal Obamacare. Why are the majority Republicans sitting on their hands, with this, and so many other issues? The best fix for Obamacare is to repeal it.

  3. some more over reach by the government. It’s not their business who is doing the paying. Government has gotten so intrusive, putting their noses into everyone own private business. It’s time the government gets put in its proper place and out of our faces. This is illegal.

  4. “Rep. Charles Boustany has introduced legislation in the House (H.R. 2911) and Sen. Charles Grassley, in the Senate (S.1697) to remedy the problem.”

    If this is not a specific part of the regulation but is simply an IRS interpretation of it, how about if these two introduce legislation that takes away the IRS’ discretion to make new legislation through interpretation?

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