A couple of weeks ago I talked about the penalties for individuals who do not have health insurance coverage, now let’s talk about the penalties for small businesses who do not offer coverage to their employees.
For businesses with at least 50 employees who do not offer coverage and have at least one full-time employee who received the premium tax credit on their individual return, the penalty will be $2,000 per full-time employee excluding the first 30 employees. Let’s say a business has 51 employees and one of the employees received the premium tax credit on their individual return. The business will be penalized $42,000 ($2,000 x 21).
If the business has at least 50 employees and offers coverage and one of their full time employees receives the premium tax credit the penalty is $3,000 for each employee excluding the first 30 employees. If we use the same example as before the penalty is now $63,000! The lesson here is that business owners not only have to provide coverage but it has to be enough coverage to keep its employees from receiving the premium tax credit.
I guess the good news is that business owners with at least 50 employees have until January 1, 2014 to figure out what they are going to do about Health Insurance coverage for their employees.