If you’re having trouble keeping up with the latest regulations regarding the Affordable Care Act — you’re not alone. On January 1, many ACA obligations went into effect and businesses are now scrambling to ensure they comply.
The new year brings some big changes to staffing firms, as many agencies that weren’t previously providing temporary employees with healthcare benefits are now required to do so. Staffing firms with 100 or more full-time employees — defined by the ACA as an average of 30 hours or more each week — are now subject to play-or-pay taxes.
It’s Time to Play or Pay
The ACA considers temporary employees the responsibility of the staffing agency, not the client. Consequently, staffing firms with 100 or more full-time employees will now have to provide for minimum essential coverage or pay a monthly excise tax.
In the past, it has been challenging for staffing firms to provide health insurance coverage to temporary workers, due to high rates of turnover and pushback from insurance carriers. However, thanks to the law’s guaranteed availability rules and flexible minimum essential coverage requirements, new ACA-compliant insurance products are likely to become available this year.
Exploring Available Options
Surveys conducted by the American Staffing Association reveal that most firms do plan to offer full-time employees minimum essential coverage or more. In fact, most revealed plans to offer minimum value coverage that most, if not all, employees can afford.
Some staffing firms may only offer healthcare plans covering preventative and wellness visits that provide minimum essential coverage. Employees seeking more comprehensive coverage could use a public exchange to gain subsidized health insurance coverage. If their request is granted, the staffing firm would be subject to a $250 monthly excise tax for each employee receiving the health insurance subsidy.
As a result of this initiative, most staffing firms will face substantial costs. Their total financial burden will vary according to many factors, such as type of work performed by employees, health insurance plan offered, the number of people participating in the coverage and the full-time status, tenure and pay rates of workers.
Need a little help navigating the new Affordable Care Act rules and regulations? Contact ECS. We’ve been helping recruiters and clients manage contract staffing engagements since 2000.
