Small Business Lawyer Highlights New Obamacare Changes

Obamacare news, Illinois small business law lawyerBusiness law and tax law often go hand in hand. This is particularly true since the passage of the Affordable Care Act, also known as Obamacare. Regardless of whether they support or oppose this law as individuals, many U.S. small business owners have reasonable concerns about what the law will mean for their business, and questions about what they must do to comply. The compliance requirements for this law have just changed again for small businesses.

Administration Delays Health Care Rule for Small Businesses

The Washington Post reports that the Obama administration has delayed the implementation of a health care rule for small businesses. The Internal Revenue Service (IRS) and the Treasury Department announced this month that they will not enforce financial penalties against small businesses that provide Health Reimbursement Arrangements (HRAs) to their employees until this July.

What are HRAs?

When a small business uses an HRA, the business provides a spending account to its workers that the employees can use to help pay for individual health insurance plans. Employers often do this because it is a tax-free means to help with employees’ health care costs. However, HRAs do not comply with the requirements for small businesses (or large businesses, for that matter) under the Affordable Care Act. What this means is that ultimately, once the penalties for being non-compliant with Obamacare are enforced, employers who choose to continue using HRAs could face fines of as much as $100 per employee per day. These penalties will be collected by the IRS in the form of an excise tax. Among small businesses that do not provide employees with health insurance, as many as one in seven use some sort of HRA or related method of helping employees pay for health care.

What this Means for You

If your small business helps your employees with health care coverage through the use of an HRA or similar scheme, it may be in your financial best interests to consider a change. Fortunately, you now have a few additional months to make a decision before the tax man comes calling.

What method of providing (or choosing not to provide) health insurance to your employees makes the most sense for your business depends on a host of factors, including the number of employees you have, what sort of hours they work, what sort of benefits they expect and are used to receiving, the costs of insurance plans in your geographic location, and your other tax responsibilities. Each business is unique, so there is no one-size-fits-all prescription. Hence, it is extremely important for you to discuss your specific situation with an experienced local tax attorney.

Call Gierach Law Firm Today

When you need the help of an Illinois small business law attorney you should call the Gierach Law Firm. When you call us at 630-756-1160 you will begin a relationship with an experienced business, tax, and estate planning lawyer with over 30 years of experience. Call today.