Obamacare forced him to stop reimbursing employees for their health insurance and made his employees cancel their plans, a Maryland business owner told a Senate committee Wednesday.
In testimony before the Senate Small Business Committee, Full House Marketing & Print President and CEO Tom Kunkel said he was, initially, a fan of Obamacare – until he got the news that he had to stop helping his employees afford health care under the Affordable Care Act (Obamacare):
“In a meeting with my accountant June 2015, I was made aware of IRS Notice 2013-54, which prohibits businesses from assisting with employees’ individual market health insurance.
“I was just stunned. I could no longer help my employees with health care expenses. Mid-year, I had to tell my employees I could no longer reimburse them for health care and that they were essentially on their own.”
Under Obamacare, generous employers like Kunkel face a penalty of $100 PER DAY, PER EMPLOYEE, which could drive many out of business, the National Federation of Independent Businesses (NFIB) explains:
“In 2013, the Internal Revenue Service (IRS) published sub-regulatory guidance that prohibited employers from further assisting employees with these employer payment plans, stating the arrangements violate the ACA’s group health plan requirements.
“One year later, in a frequently-asked-questions (FAQ) document, IRS attached a $100 per employee per day penalty for continuing the practice. Enforcement began July 1, 2015, so this tax season will be the first time both employers and employees are filing returns at the same time, inviting increased audits and fine exposure. Penalties of this magnitude would be catastrophic for small businesses, forcing many to close their doors. And these businesses are trying to help their employees.”
Nearly a million businesses (912,000) are being prevented from helping their employees pay for health plans, since 16% of the nation's 5.7 million small businesses reimbursed employees for their health plans, NFIB research finds.
Kunkel told the Senate committee that the Obamacare penalty prevented his employees from keeping their current plans – and even forced one employee with cancer to go without her medication for nearly a month:
“I had several employees who could not afford their premiums without my contribution. Since they were mid-year in their plans, they were forced to cancel insurance, reenroll in a lower cost plans, and then start over with a new deductible for the year. It was very difficult.
“One of my employees has cancer, and was not able to get his prescription refilled for over 3 weeks because of the new plan. He also had to pay his deductible all over again. It was a heartbreaking situation. I do not believe this is what lawmakers intended when they created the law.”
And, even though the Obamacare penalty makes reimbursing employees unaffordable, his employees blame him for this lost benefit, Kunkel said:
“I am in a situation where my employees cannot afford insurance, and I am prohibited from helping. I look like the bad guy.”