IRS to Penalize Employers Who 'Pump and Dump' to Avoid ACA Mandate

May 27, 2014 28 view(s)
IRS to Penalize Employers Who 'Pump and Dump' to Avoid ACA Mandate

In a question-and-answer posted on its website, the Internal Revenue Service (IRS) says it will fine employers $100 a day per employee if they pump up their workers' pay with extra cash and then dump them onto the Obamacare exchanges to buy their own health insurance.

This "pump and dump" strategy is designed to make an end run around the employer shared responsibility provision of the Affordable Care Act (ACA) that requires businesses with 50 or more employees to provide health insurance for their workers or pay a penalty.

Though the shared responsibility provision has been twice delayed and modified, it is scheduled to go into effect next Jan. 1 for employers with 100 or more employees and then the following year for businesses with 50 to 99 employees.

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