Commentary from Twila Brase
The gloves are coming off. We’re 11 months from full implementation and the real-world impact of Obamacare is hitting the newswires. Taco Bell and Wendy’s just cut the hours of hundreds of employees to avoid the Obamacare employer health insurance mandate. These workers will not only not have health insurance, they will have less money to pay for it and may be forced into Medicaid under the individual mandate.
Now, the Internal Revenue Service is warning employers not to avoid the employer mandate. The IRS issued a 144-page notice which says they will soon issue proposed regulations with “anti-abuse rules.”
This means penalties. The IRS intends to penalize any employer who dares to follow the law by finding the Obamacare’s legal loopholes and employing perfectly legal tactics to avoid its penalties. These legal tactics are nothing new. But President Obama doesn’t like it so he’s called out the IRS bloodhounds.
In fact, nothing in the Obamacare law says employers can’t cut hours, re-hire, split companies into separate legal entities to shrink the size of the company to the requisite penalty-avoiding 49 employees, or use temporary agencies. As the National Federation of Independent Business (NFIB) states, “A business can avoid the penalties by firing employees, by not hiring new ones, by replacing full-timers with part-timers, or by outsourcing.”
In addition, because Obamacare defines “full-time” as 30 hours/week, employers have good reason to cut the hours of workers to 29 hours a week, which is exactly what Wendy’s and Taco Bell have done. But the IRS hopes to shut down these legal maneuvers through regulatory overreach.