The Affordable Care Act has left many staffing agencies with questions regarding whether or not they’ll be forced to offer healthcare coverage to temporary employees. If you’re nervous about this, you’ll be relieved to hear you won’t necessary need to incur this added expense. The ACA only subjects employers to play-or-pay taxes for full-time workers.

In this case, a full-time employee is a person working an average of 30 or more hours per week in any given month. The government acknowledged it would be difficult for companies to offer health insurance coverage or determine employer tax obligations on a monthly basis, when they have employees on staff who hold part-time or irregular hours.

Look-Back Measurement Period

A look-back measurement period was put in place to assist companies that employ temporary workers. Using this method, companies can look back up to 12 months to determine an employee’s status for benefit eligibility. Employers are permitted to use this method for both ongoing and new temporary employees.

Several factors must be taken into account to determine whether an employee qualifies as temporary staff under the look-back rules. Some of these factors include:

• Whether the person is replacing an employee who is full-time or temporary
• Variation of hours of employees in similar positions above and below 30 per week and the level of transparency work hours were initially communicated to employees
• Whether employees have the right to reject staffing assignments
• If there are frequently periods where no work is offered
• Whether assigned are typically offered for varying durations
• If assignments do not typically extend beyond 13 weeks

If the company chooses a 12 month look-back period, a temporary employee would be required to work at least 1,560 hours to qualify as full-time.

It is expected that staffing firms will not be required to purchase healthcare coverage for most temporary employees. However, staffing firms that hire employees under the expectation of full-time work for longer periods of time will need to offer healthcare coverage.

Having a little trouble understanding the new Affordable Care Act rules and regulations?  Partner with ECS. We’ve been helping recruiters and clients manage contract staffing engagements since 2000.