The new year has officially arrived, meaning the new legal obligations of the Affordable Care Act (ACA) are now in full force. Many new changes to the ACA went into effect on January 1 ─ and there’s a very good chance they will affect your staffing firm. It’s important to make sure you have a strong understanding of these new laws, so you can ensure your firm is fully compliant.

Learn More About the ACA

Want to know how the ACA will impact your staffing firm and your clients? Review the following facts to learn more:

• What does the ACA mean for your staffing firm? Starting January 1, staffing firms with more than 100 full-time and full-time equivalent employees will be subject to new “play or pay” requirements. You’ll be responsible for a non-tax-deductible excise tax if at least one full-time employee is eligible for subsidized coverage from a public health insurance exchange. You can choose to “pay” if you don’t offer “minimum essential coverage” to at least 70% of full-time employees and their dependents or “play” by offering the minimum essential coverage.
• Will you need to offer health insurance coverage to temporary workers? Yes, you will likely have ACA-compliant insurance products to offer your temporary workers in 2015.
• Is your firm subject to taxes on all temporary employees? No, you’re only subject to pay-or-play taxes for your full-time employees ─ defined as those working an average of 30 or more hours per week.
• Will your clients have employer responsibilities for their contract workers? Most likely, no. The term “employer” is defined the same under the ACA as the Employee Retirement Income Security Act (ERISA), which is determined by the common law multifactor test.
• What happens if a client’s staff drops to less than 100? There are no definitive answers to this question. The answer will most likely be dependent on whether the main purpose of the decrease in staff is to sidestep ACA employer coverage or tax obligations.
• Is it okay to help clients cut costs by providing them with part-time employees? The ACA only pertains to full-time employees working an average of less than 30 hours per week. It is perfectly acceptable for staffing firms to provide companies with part-time help if needed.
• Can companies terminate or refuse to reassign temporary workers to keep them from achieving full-time ACA status? No, this type of behavior would most likely be considered abusive and may also violate ERISA.
• Do staffing firms have the ability to correctly estimate their ACA compliance costs? Probably not, as there are a number of different factors that determine a staffing firm’s total ACA compliance costs. These costs will vary by firm and many are still unknown.

Need a little help understanding how the Affordable Care Act will impact your staffing firm? Contact ECS today. We’ve been helping recruiters and clients manage contract staffing engagements since 2000.