IRS Looks to Force Obamacare on Employers Who Cut Staff

A few months ago I predicted here that Obamacare would result in a “great chase,” by which I meant that smaller employers would react to the health insurance mandate by reducing staffing to under 50 full time employees to escape the requirement. This will, I predicted, set off a ”great chase:” From my post, “Obamacare and the ‘Great Chase’:

Businesses will try to cut their losses by reducing employee hours or by keeping their workforce under 50. The technocrats will respond by changing the rules, say, by lowering the full-time employment requirement to 40 and/or reducing the number of hours worked that qualify as “full time employment.” Businesses will react again, and the government will respond. The chase will be on.

Faster than I thought, the government has proved me right. (I am pretty good at this predicting business.) The IRS has just published proposed rules that will, if finalized, require coverage in some cases when an employer has only 40 full timers. From the New York Times story:

Under the rules, employers must offer coverage to employees in 2014 and must offer coverage to dependents as well, starting in 2015. The new rules apply to employers that have at least 50 full-time employees or an equivalent combination of full-time and part-time employees. A full-time employee is a person employed on average at least 30 hours a week. And 100 half-time employees are considered equivalent to 50 full-time employees. Thus, the government said, an employer will be subject to the new requirement if it has 40 full-time employees working 30 hours a week and 20 half-time employees working 15 hours a week.

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