Newspaper article The Florida Times Union

FACT CHECK; Employers Unlikely to Take ACA Loophole

Newspaper article The Florida Times Union

FACT CHECK; Employers Unlikely to Take ACA Loophole

Article excerpt

Byline: Carole Fader

Is it true that President Barack Obama's executive actions on immigration include a $3,000 bonus to employers for each immigrant they hire instead of U.S. citizens? I heard it on Fox News.

Interestingly enough, the question comes up because of a connection between the Affordable Care Act and Obama's executive actions on immigration.

As reports, employers may be required to pay penalties if their employees are eligible for tax credits to purchase health insurance through the ACA's marketplaces. But people who gain provisional legal status under Obama's immigration plan are not eligible for health care subsidies - leading some Republicans and conservative media outlets to say this creates an incentive for employers to hire those with provisional legal status over U.S. citizens.

Health care experts told that this could happen, but only rarely. And a White House official told the fact checker that an employer who knowingly hires or fires employees based on their eligibility for health care tax credits could be accused of discrimination under the ACA and other laws.

Obama's immigration plan gives three years' relief from being deported to parents who are in the country illegally but who have children who are U.S. citizens or lawful permanent residents. To get the relief, the parents must have lived in the United States for at least five years, and they must register and pass background checks. The White House has estimated that 5 million people are eligible for the waivers.

These immigrants, reports, also would be allowed to work for three years. But they would not be eligible for federal tax credits to buy insurance on the health exchanges, and they couldn't even buy insurance through exchanges if they paid for the insurance on their own - as would have been permitted in the immigration bill that passed the Senate in 2013.

Some have argued that would encourage employers to hire those with provisional legal status over U.S. citizens to avoid an ACA penalty imposed on businesses that don't provide insurance to their employees, or that offer plans that don't meet the law's minimum coverage requirements, or are deemed unaffordable by the ACA's definition.

But this theory has several flaws, notes.

First, there is no mandate for companies with fewer than 50 full-time employees. In 2007, about 96 percent of companies - 5.8 million out of 6 million - had fewer than 50 employees. Most people work for large companies, and about 96 percent of firms with 50 or more employees offer health insurance.

Still, thousands of mid- to large-size companies could face penalties under two scenarios, notes:

- Employers with 50 or more full-time workers in 2016 (and 100 or more in 2015) that do not offer health insurance benefits would have to pay a penalty if just one employee receives a health insurance tax credit. …

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