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This article in the New York Times highlights an important “tension” employers should recognize when planning for the Affordable Care Act’s employer shared responsibility mandate coming in 2014.  An employer may be subject to penalties if the employer does not offer “affordable” health care.  Under one of the safe harbors provided by the Internal Revenue Service, an employer’s health care is “affordable” if an employee’s cost for employee-only coverage does not exceed 9.5% of the employee’s taxable wages reported on Form W-2.  What’s important for employers to recognize is that an employee’s taxable wages reported on Form W-2 are the employee’s wages after deducting the employee’s pre-tax contributions for benefits, including pre-tax contributions to a Code Section 401(k) plan, to health or dependent care flexible spending accounts, and for other benefits (including, in a circular calculation, the employee’s pre-tax contributions for health care).  So an employer that encourages employees to start or increase their 401(k) plan contributions, or an employer that shifts employee compensation from taxable wages to retirement plan contributions, might be inadvertently making it harder for the employer’s health care coverage to be “affordable,” potentially exposing the employer to the shared responsibility penalties.