KEYWEST_RICKS Posted December 29, 2014 Report Share Posted December 29, 2014 From what i have seen in print and at seminars........ a company cannot say to an employee....... i will pay you $10 per hour for your hourly wage that is subject to withholding and fica and i will also pay you $2080 per year... or $1 per hour.... for you to use for health insurance if you wish. even if this is also post tax and subject to withholding and fica. so you have a total gross wage of $22,880 that due to aca... if you have more than one employee you cannot do the above and you would be subject to $100 per day per employee penalty. can i not, though, just simply say i am paying you $11 per hour???????? total gross wage of $22,880 all subject to withholding and fica and you do whatever you want to do with the $11 per hour??? i think i am really missing something here on this issue. jeff Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted December 29, 2014 Report Share Posted December 29, 2014 From what i have seen in print and at seminars........ a company cannot say to an employee....... i will pay you $10 per hour for your hourly wage that is subject to withholding and fica and i will also pay you $2080 per year... or $1 per hour.... for you to use for health insurance if you wish. even if this is also post tax and subject to withholding and fica. so you have a total gross wage of $22,880 that due to aca... if you have more than one employee you cannot do the above and you would be subject to $100 per day per employee penalty. can i not, though, just simply say i am paying you $11 per hour???????? total gross wage of $22,880 all subject to withholding and fica and you do whatever you want to do with the $11 per hour??? i think i am really missing something here on this issue. jeff Don't overthink this provision. As long as the employer adds it to boxes 1, 3 & 5 and withholds tax appropriately, what you call it is totally irrelevant. 2 Quote Link to comment Share on other sites More sharing options...
KEYWEST_RICKS Posted December 29, 2014 Author Report Share Posted December 29, 2014 jack, i am not sure i agree with you based on the following: According to the Q & A, an employer cannot give an employee cash to purchase insurance coverage on the individual market, even if the employer treats the cash as wages, withholding income tax and FICA/FUTA taxes. Essentially, the Department has directed employers to stay out of the health insurance arena completely unless purchasing group health plans for their employees. Notice 2013-54 had specified that employers could forward post-tax payments to private health insurance companies at the request of their employees for the purchase of the employees' individual health insurance. The Notice referred to this as a "payroll practice" that was still acceptable. The most recent Q & A (reprinted here) clarifies that this "payroll practice" exception is very narrow. Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted December 30, 2014 Report Share Posted December 30, 2014 jack, i am not sure i agree with you based on the following: According to the Q & A, an employer cannot give an employee cash to purchase insurance coverage on the individual market, even if the employer treats the cash as wages, withholding income tax and FICA/FUTA taxes. Essentially, the Department has directed employers to stay out of the health insurance arena completely unless purchasing group health plans for their employees. Notice 2013-54 had specified that employers could forward post-tax payments to private health insurance companies at the request of their employees for the purchase of the employees' individual health insurance. The Notice referred to this as a "payroll practice" that was still acceptable. The most recent Q & A (reprinted here) clarifies that this "payroll practice" exception is very narrow. Just exactly how is this information going to be sent to the IRS? Don't overthink this and turn off your logical mind. The IRS will ONLY receive the W-2 information. GOOD GRIEF!! Has the IRS struck such deep fear into all of us that we think they are monitoring all conversations? Don't overthink it!!! 3 Quote Link to comment Share on other sites More sharing options...
jklcpa Posted December 30, 2014 Report Share Posted December 30, 2014 can i not, though, just simply say i am paying you $11 per hour???????? total gross wage of $22,880 all subject to withholding and fica and you do whatever you want to do with the $11 per hour??? jeff ^ This is no problem. All the company is doing is giving a valued employee a raise, nothing more. Report the wages on the W-2 in the usual manner. It is not related to health insurance. 1 Quote Link to comment Share on other sites More sharing options...
Randall Posted December 30, 2014 Report Share Posted December 30, 2014 I'm with Jack on this. Of course, you shouldn't go around broadcasting it as if it were official policy (written or oral). But increasing employee pay for cost of living increases or bonus for competent work should be fine. Quote Link to comment Share on other sites More sharing options...
michaelmars Posted December 30, 2014 Report Share Posted December 30, 2014 we pay per position so if we are offering $100,000 for the job then its $85000 if they need coverage and the 100k if they don't. We only care what the position is costing us out of pocket. Quote Link to comment Share on other sites More sharing options...
KEYWEST_RICKS Posted December 30, 2014 Author Report Share Posted December 30, 2014 so michaelmars..... would the above post from the dept of labor cause you concern you then? i am not so worried about the IRS but i believe the dept of labor is saying this is a violation. and again....$100 per day per employee gets my attention big time. jeff Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted December 30, 2014 Report Share Posted December 30, 2014 so michaelmars..... would the above post from the dept of labor cause you concern you then? i am not so worried about the IRS but i believe the dept of labor is saying this is a violation. and again....$100 per day per employee gets my attention big time. jeff And black helicopters full of blue helmeted troops are circling above just waiting to pounce... Get REAL!! Dept of labor has NOTHING to do with the IRS. IRS regs are all that matter. Paranoia is a slow steady brain killer!! Quote Link to comment Share on other sites More sharing options...
michaelmars Posted December 31, 2014 Report Share Posted December 31, 2014 no worries. legally we have to offer benefits to all if we offer to some, there is not rule as to how much we have to pay a person. Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted January 1, 2015 Report Share Posted January 1, 2015 Actually, my worry on that would be a disgruntled former employee complaint. So my advice to an employer would be "just say, we are not going to offer a group plan, due to the complexities of the new laws, so you will be getting a raise, and your insurance decisions are your personal business." Quote Link to comment Share on other sites More sharing options...
RitaB Posted January 2, 2015 Report Share Posted January 2, 2015 And black helicopters full of blue helmeted troops are circling above just waiting to pounce... 5 Quote Link to comment Share on other sites More sharing options...
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