Category Archives: Obamacare tax penalty

Don’t Reimburse Employees For Individual Health Insurance

Thousands of small employers reimburse or “pay a little extra” to reimburse employees who purchase individual health insurance…However, beginning this month huge fines are possible…even for a small family business of 2 employees if you reimburse employees for individual health insurance.

“Illegal reimbursements can also take on more subtle forms e.g. paying a higher wage in exchange for declining health plan coverage. Some of these indirect arrangements are also illegal. If you think this affects your small company, here’s someone you can talk to for free. Time is running out.”

Tax Deductibility Is Not The Main Issue Here

This is true whether or not you take a tax deduction for reimbursing these premiums!  We are referencing the latest IRS bulletin addressing the subject: Basically, the IRS argues such arrangements create the existence of a group health insurance plan…and since individual plans are not compliant with the same ACA regulations that apply to group health insurance, IRS conclusion…you are sponsoring an illegal plan!  The penalties are punitive, to say the least (read further for details).

Expensive Mistake If You Reimburse Employees Improperly

I don’t think we can overstate this:  it’s a mind-blowing change of policy that negatively impacts smaller employers. Recently, MarketWatch did a good job of bringing this subject to mainstream media, in this article:

“Under an employer payment arrangement, the employer reimburses participating employees for premiums paid for their individual health insurance policies or pays the premiums directly on behalf of participating employees….The penalty for running afoul of the market reform restrictions is $100 per-employee per-day, which can amount to $36,500 per employee over the course of a full year. (from MarketWatch:  The full story)

If you think this affects your small company, don’t focus on the problem, focus on the solution: here’s someone you can talk to for free. Time is running out.

Don't Reimburse Employees For Individual Health Insurance


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California Open Enrollment Extended to

California Open Enrollment Extended to April 30th

Obamacare Choices… Free Assistance Before April 30th

If you (or someone you know) has not yet purchased individual health insurance, good news is here:

Although the California Open Enrollment extended period closed April 30th, you could qualify for a qualifying special enrollment event, if certain circumstances exist. [ Read more about qualifying Special Events here.]

Read why Everybody’s Happy With Obamacare in California

Questions About Special Events?  Get Local Assistance Now

Obamacare Penalty Tax

An Obamacare Penalty Guide For All California Residents

The purpose of this article is to help individuals, families, and early retirees avoid the Obamacare penalty under the Affordable Care Act.  Obamacare Penalty

Don’t miss the next Open Enrollment season, and avoid mistakes that could cost you money and opportunity.  This is a good reference article, so retain it until you need it.


  • Since January 2014, most people will be required to have public or private health insurance or pay a financial penalty AKA the Obamacare Penalty tax.

Avoid the Obamacare Penalty and use the savings to buy vision care insurance


  • As of 2016, the penalty has been increased substantially.
  • Parents with children who are tax dependents will be responsible for making sure their children comply or also face penalties.

[Note: If you are a small business or employer representative researching your obligations under the new law, click here.  The remainder of this article is intended for California individuals and families.]

 What Is The Obamacare Penalty For Not Having Health Insurance?

  • In 2014, individual penalty was the greater of 1% of the family income above the tax filing threshold or $95 per adult and $47.50 per child (max $265 per family).
  • By 2016, the maximum penalty grows to the greater of 2.5% and $2,085 per family. 
  • Do you qualify for lower rates with a Premium Assistance Subsidy?  Find out here.
  • CoveredCA-ComparisonChart and Paper Application

How will mandatory health insurance and the Obamacare penalty tax be enforced?

The IRS will administer such penalties on personal tax returns.  Besides the Obamacare penalty aspect, there is also some positives, deserving mention:  Follow the actual experience of an Agent’s first week of Obamacare on this Prezi:  My First Week of Obamacare Open Enrollment

In summary, avoid mistakes that can cost you money and opportunity. Tax issues should be reviewed with your tax advisor.  Here is a resource from the IRS: IRS Affordable Care Act Tax Provisions.

 You can find local assistance.