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ACA: Providing Benefit Dollars

Per the ACA, can an employer get a tax break for providing a benefit dollar to employees with an individual health plan? Not if you're a large employer...

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Q: Per the ACA, can an employer get a tax break for providing a benefit dollar to employees with an individual health plan?

A: Employers can provide a benefit dollar, but there is no tax break for doing so. Any benefit dollar provided must be included in regular income for tax purposes to avoid any “double dipping” (somebody getting double tax benefits on the same dollar). Large employers (50+ full-time equivalent employees) are strongly discouraged from reimbursing employees for purchasing individual insurance and may be penalized $100 a day up to $36,500 per year, per employee, for doing so.  The employer mandate under the ACA is for large employers to actually offer health insurance rather than encourage employees to shop for an individual health plan.

Small employers, however, are not under the same obligations as large employers.  If you are a small employer wanting to provide health insurance and wondering about available tax credits, please contact us at aca@stratus.hr.

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