(Washington, D.C.) – U.S. Sen. David Vitter (R-La.), Chairman of the Senate Committee on Small Business and Entrepreneurship (SBC), today sent a letter to Jacob J. Lew, Secretary of the Department of Treasury, voicing his concern over an Internal Revenue Service (IRS) notice that forces small businesses into Obamacare Exchanges via fines totaling up to $36,500 per employee.

“As if Obamacare wasn’t bad enough, the Obama IRS is now forcing small businesses into compliance. This is just another example of the Obama Administration’s bad policies that are crushing American small businesses and their employees,” said Vitter. “Given that small businesses make up 99.7% of all employers in the United States and employ over fifty-six million Americans, we should make it our first priority to cut red tape and crippling rules and regulations to grow our economy and protect good-paying jobs.”

In September 2013, the IRS issued a notice dictating that employers that do not offer a group health plan, but instead provide tax preferred dollars through a Health Reimbursement Arrangement (HRA) to their employees to pay health insurance premiums or other direct medial expense, will face penalties of $100 per employee per day, not to exceed $500,000 per year. This rule took effect July 1, 2015. Reimbursing an employee for medical care expenses incurred by the employee or an employee’s dependent, an HRA is funded solely by an employer and traditionally is excluded from the employee’s income.

As SBC Chairman, Vitter has been working to relieve tax burdens for small business, including introducing the Small Business Tax Compliance Relief Act (S.1827) in June, which has received wide bipartisan support. Click here to read more.

Click here to read Vitter’s letter to Secretary Lew.