Gov. Scott Walker’s decision not to accept federal funding to expand the state’s health-care system could contribute to some state employers being collectively penalized by paying millions more in taxes, according to a report released Tuesday.
The report, released by Jackson Hewitt Inc., looked into tax provisions state employers could be required to pay under the Affordable Care Act.
The “shared responsibility” provision of the ACA would require employers to pay a tax penalty if employees seek aid from tax credits that help low-income individuals pay for their health-care coverage. The provision applies specifically to businesses that employ at least 50 people.
If a business does not provide their employees with health insurance and at least one of their employees qualifies for a tax credit, they would be liable for paying $2,000 for every additional employee after the first 30.
However, if a business has 50-plus employees and provides health coverage, they are required to pay the cheaper of two options. Either $2,000 per employee past 30 or $3,000 for every employee that takes tax credits.
The study found there are approximately 12,036 people in Wisconsin that would qualify to receive the tax credits.
Walker’s decision would require significantly more people to purchase their own health care, many of whom would contribute to an increase in total taxes because they would fall into low-income brackets that make them eligible for the tax breaks.
The study stated it used broad assumptions and numbers to estimate the total costs to state businesses. Actual tax spending would depend on the number of qualified individuals in Wisconsin who actually apply for the tax credits.
