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Penalties for not offering health care coverage

Should businesses just pay the penalty?

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Since the Affordable Care Act became law, Reynolds & Reynolds has had the play-or-pay conversation with many of its large clients, Gooding said.

“Some of the employers have looked at it as, ‘Well, I’d be a fool not to just pay the penalty,’ based on what their costs are today,” he said. “Some employers can look at it as an economic opportunity for their organization, and still be complying with the current-day legislative rules in regard to health-care delivery.”

In other words, as John Hovey, president of Focus OneSource, a West Des Moines human resources, accounting and payroll outsourcing firm, noted, “there’s really nothing in the law that says employers have to provide health-care coverage.”

“But if they do drop their health-care plan,” Hovey said, “they’ll not only be paying the Internal Revenue Service the penalties that may be applicable; they still have to figure out how they’ll keep or recruit employees to their company.”

The Business Record took a look at the penalties that businesses could face for not offering coverage.


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