Great news for small employers that reimbursed their employees for the cost of individual health coverage during 2014!
The IRS has announced it will waive the $100 per day, per employee penalty for violating rules under Health Care Reform under Internal Revenue Code Section 4980D in this situation. (IRS Notice 2015-17, February 18, 2015.) The penalty, which could be $36,500 per applicable employee is very onerous. Many tax return preparers will also be relieved that they won’t have to give this terrible news to their clients.
The employers that qualify for the waiver aren’t required to file IRS Form 8928 for 2014.
The relief doesn’t apply to “Applicable Large Employers.”
The IRS is providing this relief to give small employers time to either discontinue the practice of paying for individual medical insurance for their employees or putting a qualified group health plan in place. The waiver applies to payments up to June 30, 2015.