Employers Can Dump Workers To HIX For A Price

The latest tweak from the Internal Revenue Service essentially prohibits employers from giving workers tax-free dollars to buy policies in the online public marketplaces created by the health law. The New York Times first reported the rule. But the Times’s headline, “I.R.S. Bars Employers From Dumping Workers Into Health Exchanges,” overstates the case.

Nothing stops employers from canceling company plans and leaving workers to buy individual policies sold through the exchanges — as long as they pay the relevant taxes and penalties, said Christopher Condeluci, a Venable lawyer specializing in benefits and taxes. Those will vary according to a company’s size and circumstances.

If an employer has fewer than 50 workers, there is no penalty under the health law for dropping coverage or never offering it. Larger companies that don’t offer coverage may be liable for fines of $2,000 and $3,000 per worker starting next year. (The employer mandate doesn’t kick in for firms with 50 to 99 workers until 2016.)...