Making the Business of Growing Your Business Easier
Our staff has exhaustively reviewed the Affordable Care Act; commonly known as Obamacare, and identified several strategies that business owners and their accountants may use to control or eliminate the cost impacts of Obamacare's employer paid insurance mandates. Most tax and business planning firms, ours included, typically charge thousands of dollars in consulting fees for this information. However, we feel that Obamacare has such a widespread negative impact on Mid-Sized companies, with between 50 and 500 employees, that we had to prepare and deliver a more affordable and more accessible Guide. The price is $155; about the same as a college text book these days, which goes toward covering the cost of thousands of hours of legal research that went into it. If you do not find a way to save at least $50,000 a year in this Guide we will refund the cost no questions asked.
More On Business Planning in the Obamacare Era
The first thing to understand about business strategy in the Obamacare era, is that for the first time in history, the IRS will be tasked with health insurance regulation and enforcement. Under Obamacare, if you have 50 or more employees, do not provide qualifying health insurance plans for all your staff, and if just one employee is granted an easy to get and very common subsidy from the government to get cheaper insurance from one of the newly created healthcare insurance exchanges, you will be accessed a $2,000-$3000 per employee penalty.
There have been a lot of questions about whether you will have to provide coverage for your employee’s dependents. The IRS has ruled that you have to provide coverage for the employees children under the age of 26, but not for his or her spouse. So if your employee has 4 adult kids aged 19-25, guess what, you have to provide insurance for all of them plus the employee, for a total of five people, and the employee cannot pay more than 9.5% of his annual pay to help cover the cost to the business. So a business owner will have to pay 90.5% of the costs for health insurance for 5 people on this single employee in this scenario.
If a business has 100 fulltime employees, and they average one child apiece, this company is looking at paying over $500,000 a year in insurance costs, or paying $140,000 in penalties every year to the IRS. Those penalties are benchmarked to rising health insurance premiums, so they will only go up and up and up year over year. Herein lays is the big problem with Obamacare, it creates a huge competitive donut hole, where mid-sized companies, between 50 and 400 employees are at such a huge disadvantage to very large and very small companies, that many will be forced to close up shop by Obamacare. Small companies (under 50 employees) are not required to provide costly employer paid health insurance, and big companies can either afford it, or will have scores of lawyers finding ways to help them successfully avoid it. Mid-sized companies, that have a high percentage of their expenses allocated to low cost labor, are in big trouble under Obamacare.
In the absence of making use of complex tax planning rules in a way that reduce a business’s Obamacare tax penalties, mid-sized employers would have to either raise their prices, or reduce their employees pay in order to cover the additional costs health insurance. Both of these can be devastating in their own right, as mid-sized companies can find that they have to price themselves out of competitiveness in their industry, or risk losing their best employees to smaller or larger competitors because they have to pay them less.
The monitoring, enforcement, and collection of these requirements and penalties fall to the IRS. Accordingly, if you cannot or do not want to provide full coverage health insurance to all of your employees and their dependents, Obamacare Cost Reduction Strategy part and parcel with Tax Reduction Strategy, because you will be taxed hundreds of thousands of dollars unless you either pay for health insurance for every employee, or understand the tax planning rules that will help keep you from incurring the IRS Obamacare employer tax penalties.
The same type of rules and principles that help you reduce and avoid excess taxation are many of the same rules and principles that will help your enterprise avoid being subject to the Obamacare employer paid health insurance requirements and/or penalties. This guide will help both employers and their CPA's understand those tax planning principles in a thorough but concise manner, that is easily actionable, and will save most employers hundreds of thousands of dollars per year.
We have prepared a definitive guide for employers and their accountants to reduce or eliminate the costs associated with Obamacare, with multiple options of clearly defined actions plans, so that you have several options to suite your unique business situation.
If you have any Questions about Obamacare Employer Mandates or our Obamacare Employer Guide, please send your questions to: