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Obamacare Still Lets Employers Discriminate—for Now

Question: Under Obamacare, can small businesses still offer health insurance based on classifications of employees, such as offering management and salaried employees insurance but not offering it to technicians and hourly employees? If we can’t do that, can we offer other extra benefits to our management team? And can we cover less of their premiums since they are already making more money than the rest of the staff?

Answer: The Affordable Care Act extended nondiscrimination rules for health insurance that originally applied to self-funded insurance plans, typically offered by large employers, to all health insurance plans. That means that, under Obamacare, those rules are likely to apply to small and midsize companies as well. The IRS rules, dating back to 1981, don’t allow employers to offer health insurance—or better health insurance—only to their executives and owners.