Leaders of the largest lobby for small businesses are crying foul over a little-known IRS rule that they say will impose crippling penalties on the employers who can least afford a big fee hike.
The rule is one of many drafted by the IRS in response to the Patient Protection and Affordable Care Act. It would fine companies that do not provide their workers group health coverage, instead offering employees health reimbursement arrangements — tax-free reimbursements to help employees purchase individual insurance policies.
A recent survey by the National Federation of Independent Business found that 14 percent of small businesses that do not provide health insurance to their employees instead offer them HRAs.
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