Small-business owners are descending on Washington this week to lobby Congress to roll back an ObamaCare rule that could hit companies with thousands of dollars’ worth of penalties.
About 150 small-business owners, organized by the National Federation of Independent Business (NFIB), will head to Capitol Hill on Thursday to make the case to members from their states on legislation that would change the rule.
At issue is a 2013 ruling from the IRS that imposes steep penalties on employers who offer tax-free reimbursement to their employees to help them purchase individual health insurance plans. The IRS ruled that such Health Reimbursement Arrangements (HRAs) violate ObamaCare requirements that forbid limits on the coverage of essential benefits and require preventive services to be covered for free.
Businesses that continue offering such arrangements are now subject to an excise tax of $36,500 per employee per year.
The business community argues the penalty punishes small businesses that can’t afford employer-sponsored coverage and are trying to provide some financial help to their employees.
“This is a brand-new penalty that nobody knew about, and it’s huge,” said Jack Mozloom, an NFIB spokesman.
He said small businesses are trying to help their employees with healthcare costs and “their thanks for doing so is a big fat fine.”