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New IRS Healthcare Rules Hits Employers Hard
The tentacles of Obamacare are starting to coil around employers now that the Internal Revenue Service has released its proposed rules for how the 2010 Affordable Care Act is to be instated. Released Tuesday, and announced Wednesday, the new rules curb most wellness programs from qualifying for the coverage employers are expected to offer every single one of their full-time employees. If even one employee lacks coverage, the employer will pay a heavy tax penalty. Meanwhile, many barebone wellness programs are being excluded: employers are expected to pay more for more coverage. The wellness programs were said to be discriminatory, charging more for those with, say, higher cholesterol. Labor unions and employee advocacy groups resisted them on this account – keeping more in line with an “all pay equally ethos,” which means if you are healthy you pay as much as if you are chronically sick. What this means, ultimately, is that employers are expected to pay more than they ever have when the economy is still doing the worst it’s done in years. Sure, things have been nosing up a bit these last few years – they were much worse in, say, 2009 – but the new imposed payroll taxes, the cutting of government spending, and the typical yearly “spring swoon,” have caused hiring to reach the lowest its been since last August. “We are very happy with the rules,” said Dania Palanker, the senior counsel for the National Women’s Law Center, as reported by Reuters; her group had lobbied to bar wellness programs to qualify for employer’s minimum healthcare coverage, and few will now qualify. “It is a setback for employers,” said Greta Cowart, Haynes and Boone LLP partner. Employers now “lose part of the bang for the buck in terms of penalty.” That’s one way to put it; many lose the ability to hire at all, or perhaps to stay in business. The IRS will take public comments until July 2 when considering changes.