Yesterday, The Supreme Court upheld the Patient Protection and Affordable Care Act with a close, 5/4 decision. Today, political debates about the constitutionality of the decision are still going strong.
Before scrutinizing what some people are going to say is the “biggest tax increase in all of history”, it is important to fully understand the implications of the Act and why “requiring” employers to provide employee healthcare is not going to criminalize the ones who chose not to.
First off, the tax for deciding not to (yes, you are allowed to decide not to) provide your employees with health coverage isn’t that expensive. This isn’t to imply that struggling businesses who can’t afford to buy healthcare for their employees will also be able to afford the penalties, but the good news is that the IRS can’t criminalize you for not paying the penalties. If you don’t pay the tax, the IRS isn’t allowed to levy your assets, garnish your wages, etc. The Act strictly prohibits this type of behavior.
Where does this leave states that chose not to comply with the Act? The court ruled that states can opt out, but if they do, the government is not allowed to take away any funding the state uses for existing Medicaid programs.
How do you feel about Congress’ ruling? JG Tax Group would love to hear from you. Feel free to leave a comment below!
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