The Trump administration finds itself in an awkward situation as it touts its business-friendly tax legislation at the same time hundreds of companies face fines for violating Obamacare's employer mandate, even though the president has done almost everything in his power to abolish the federal healthcare law, Politico reported on Wednesday.
Corporations have been receiving notices sent by the Internal Revenue Service demanding millions of dollars in fines for failing to provide adequate insurance coverages to workers, which will likely spur another legal fight over the health law, with the administration ironically defending a statute that President Donald Trump has repeatedly declared dead.
The enforcement actions actually cover violations in 2015, the first year the mandate was supposed to be applied, after the Obama administration suspended fines the previous year. But the Obama administration never tried to collect fines for 2015, and only in the past few months have companies started to receive those notices, with the added difficult timing of midterm elections later this year.
Employers have an opportunity to appeal the decision and present evidence that the IRS made a mistake.
"You can't ignore an IRS assessment," said Edward Lenz, senior counsel for the American Staffing Association, which represents temporary employment agencies. "You do that at your peril."
Some companies appear to be taking the strategy of inaction, for the moment, in hopes of negotiating the penalties away or that the IRS will decide not to enforce them.
But other business groups are pressing Congress, which repealed Obamacare's individual mandate in December, to do the same with the employer mandate, arguing that having one without the other is inequitable, according to The Hill.
"The whole legal basis for the employer mandate in the ACA was to support the individual mandate, and with the repeal of the individual mandate, there's no legal or logical basis for the employer mandate," said American Benefits Council President James Klein.
Many experts say that if employers start getting vocal over large Obamacare fines so soon after the GOP passed its business-friendly tax bill, congressional Republicans would have to come up with a solution.