IRS Penalizes Jackson County, Tennessee Over Obamacare

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The Internal Revenue Service fined Jackson County officials a sum of $86,147 for failing to comply with Obamacare, according to an audit Tennessee Comptrollers released Tuesday.

That penalty money, of course, will come from county taxpayers.

This is the third county in Tennessee this calendar year that must pay a huge sum of money to the feds because of the controversial health care law.

Jackson County’s failure to comply with Obamacare occurred during the 2015 fiscal year, auditors wrote.

“The county did not provide health insurance to employees from January through October 2015,” Comptrollers wrote.

“Beginning November 2015, the county provided health insurance coverage to employees; however, this coverage was not in compliance with federal regulations for certain employees. This deficiency resulted from a lack of management oversight.”

In a written response to auditors, the county mayor concurred with the findings.

The current county mayor is Randy Heady, according to the county’s official website.

“The county mayor and commission had been told by an affiliate with Zane Benefits, with whom we entered a contract, that the cafeteria plan we started in January 2015 made our county ACA compliant,” the county mayor wrote.

“In October 2015 we found that in fact we were not in compliance, and at that time, we entered a contract with another agency to offer health insurance to our employees. We have been able to sustain this offer since November 2015, in fact we entered a contract with the state to offer their insurance to our employees.”

As The Tennessee Star reported, the Grundy County School System will have to pay tens of thousands of dollars in penalties to the IRS for not complying with Obamacare, per a recent state audit.

According to the audit, the Internal Revenue Service assessed the school system a penalty of $34,060 for not complying with Obamacare during the 2015 fiscal year.

“The School Department provides health insurance coverage to its employees; however, this coverage was not in compliance with federal regulations for certain employees,” Tennessee Comptrollers wrote.

“This deficiency resulted from a lack of management oversight.”

As The Star reported last month, the federal government assessed the Smith County School System more than $35,000 for not complying with Obamacare.

That audit, however, did not offer specifics.

Other county governments in Tennessee have had their finances suffer due to Obamacare.

As The Tennessee Watchdog reported in 2015, an audit from Tennessee Comptroller Justin Wilson said Obamacare might have forced Robertson County officials to choose between raising taxes and breaking the law.

County commissioners transferred $632,500 from the General Debt Service Fund to the General Purpose School Fund to comply with Obamacare, according to Wilson’s audit. County officials needed the money to pay for health insurance for part-time employees working 30 hours a week or more, such as bus drivers and substitute teachers.

The General Debt Service Fund exists to pay county debt, while money from the General Purpose School Fund pays to keep the schools running.

Comptrollers said the transfer was illegal, based on existing case law and existing opinions from the state attorney general.

According to the Tennessee Attorney General’s Office, if a taxpayer pays taxes for a specific purpose then any other use of that money is against the law.

As The Tennessee Watchdog reported in 2013, White County officials had to raise taxes by an additional $1 million per year so county employees would have health insurance.

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Chris Butler is an investigative journalist at The Tennessee Star. Follow Chris on Facebook. Email tips to [email protected]
Photo “Jackson County Courthouse” by Brian Stansberry. CC BY 3.0.

 

 

 

 

 

 

 

 

 

 

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One Thought to “IRS Penalizes Jackson County, Tennessee Over Obamacare”

  1. Jason

    “The county mayor and commission had been told by an affiliate with Zane Benefits, with whom we entered a contract, that the cafeteria plan we started in January 2015 made our county ACA compliant,” the county mayor wrote.”

    So is the county looking to file a suit against this “Zane Benefits” to recoup the cost of the fine since we entered into a contract with them for guidance on the subject?

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