Home > Legislation, multifamily, Property Management, Uncategorized > Business Owners May Face $100-Per-Day Penalty Under ObamaCare

Business Owners May Face $100-Per-Day Penalty Under ObamaCare

September 11, 2013 Leave a comment Go to comments

Note from Lester Langdon at Realty Consultants

This may be important because real estate investors who own income producing properties may be subject to this penalty.  If an owner gives money or other compensation (even free rent) to a property manager, the owner could be subject to this penalty.

This may be true if the LLC owner is incorporated in a state other then Texas but owns property in Texas. If you are incorporated in Texas but own income producing property in a state which has set up an exchange, will it apply to you??

Doctor With Stethoscope Health Care

By Kate Rogers       Published September 09, 2013       FOXBusiness

Small business owners who thought they were off the hook for ObamaCare  regulations until 2015 may be in for an expensive wake-up call next month.

Beginning Oct. 1, any business with at least one employee and $500,000 in  annual revenue must notify all employees by letter about the Affordable Care  Act’s health-care exchanges, or face up to a $100-per-day fine. The requirement  applies to any business regulated under the Fair Labor Standards Act, regardless  of size. Going forward, letters are to be distributed to any new hires within 14  days of their starting date, according to the Department of Labor.

Earlier this summer, the employer mandate, which states that every business  with at least 50 or more full-time employees must offer workers acceptable  coverage or face a $2,000 penalty per-worker, per-year, was pushed back until  2015. But the Oct. 1 employee-notification deadline stands. Keith McMurdy,  partner at FOX Rothschild LLP, says the $100 per-day fine has been  “unfortunately overlooked” by many small businesses, and the dollar amount on  the penalty comes from the general per-day penalty under the ACA.

“The PPACA has a general $100-a-day penalty for non-compliance. Since this  requirement is in the FLSA there are also penalties there. So the general  consensus is that some penalty applies and probably the general provision,”  McMurdy tells FOXBusiness.com.

Joeseph Dutra, president and CEO of Kimmie Candy Co., has 30 employees and  brings in more than $500,000 in revenue annually, which means he has to notify  workers of the exchanges by Oct. 1. He had no idea.

“My understanding is that a lot of businesses don’t know what the  requirements are under the law,” Dutra says. “So many businesses don’t have a  designated HR department.”

Joe’s “HR department” is his son, John Dutra. John says the business was  aware of the Oct. 1 deadline for notifying workers about the exchanges, but did  not know about the $100 penalty. He says while the company will continue to  offer benefits to its employees as it currently does, the costs it will pay for  coverage overall will increase by 4%, thanks to ACA regulations.

Ray Keating, chief economist for the Small Business & Entrepreneurship  Council, says many businesses are likely unaware of this potential fine coming  down the pike for failure to comply, and that it’s unclear how the government  will be implementing the $100-per-day penalty.

“It’s a steep fine—when you start tallying up all of the costs, businesses  need to start figuring out ‘am I better off just not offering coverage and  paying the penalty?’” he says. “And there is no easy answer. With this, you are  dealing with the threat of a $100-a-day penalty fine, but you also have to go  through the process of notifying everyone, so on and so forth, so there are no  easy ways out for business owners.”

Keating says it’s simply another example of how the law will cost both  businesses — and government — more cash.

“Government costs are what so many ObamaCare supporters have glossed over,”  he says. “In general, the overall costs of subsidies and expanded programs like  these things are what small business owners are concerned about, and the Obama  folks are avoiding it.”

The White House declined to comment on how the fine would be implemented, but  deferred to the U.S. Small Business Administration, which says education on this  FLSA requirement has been part of “any and all outreach that SBA does with small  business owners.” The agency says it has participated in more than 750  ACA-related events with more than 30,000 small business owners and community  stakeholders since February 2013.

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