Like air being released from an over inflated balloon, a national sigh of relief could be heard last year when the White House announced a delay in the Affordable Care Act’s (ACA) employer mandate. However, as the employer mandate’s new “go live” date approaches, the balloon has once again filled to its over stretched state. Employers with 100 or more full-time equivalent employees (FTE) are anxiously scrambling to understand the complex law and come under compliance before the 2015 deadline.
Compared to a normal business, a staffing firm is very dynamic in that there is a constant state of flux in employment. People come and go every day. This scenario presented staffing firms with a major problem when it came to Obamacare: How do you cover someone for insurance when hours can vary week to week and you have no indication of how long the individual’s assignment might last? Fortunately, the Internal Revenue Service recognized this problem and added a clause for temporary employees. The clause allows a staffing company to evaluate the hours of its temporary employees over a 12-month period of employment before determining if they are eligible for insurance coverage.
The FTE requirement
Another area of law that has caused an increase in inquiries to the staffing industry is the FTE requirement. By 2015, all companies having 100 or more FTE employees must offer an ACA-qualified insurance program. By 2016, the requirement moves to companies having 50 or more FTEs. We predict companies that fall near the limits are looking to outsource positions to temporary agencies or have the agencies payroll a portion of the staff. By outsourcing, companies utilize a staffing firm to find and fill positions versus hiring those positions themselves. Payrolling involves having companies send people directly to a staffing agency so the agency can hire them and then lease them back to the company. In both cases, businesses defer a number of would be internal positions to the staffing company in order to allow the staffing agency the complicated task of tracking and providing insurance in accordance with Obamacare.
Though the temporary employment industry may have many advantageous ways to help other businesses deal with Obamacare, large staffing firms still have to comply with the law themselves. Given their high number of employees, the varying hours worked by those employees and the constant hiring and laying off that occurs in the industry, large staffing agencies have had to develop complex tracking systems to ensure they stay compliant with Obamacare’s regulations. Though the development of these systems is costly and cumbersome, the process has made agencies very knowledgeable on the law. This knowledge, as “Time” reported last year, provides “an opening for staffing companies to present themselves as experts in the labor rules of Obamacare law, and as a resource that other businesses can turn to for help with its many rules and regulations.”1
Now is the time to contact your staffing firm
As 2015 quickly approaches, if your business finds itself overwhelmed by the costs and complexities of Obamacare, reach out to your staffing firms. Staffing firms should be able to sit down with you to review the issues you are facing and, based on the information gathered, develop a personalized strategic staffing plan that can help your company better deal with the challenges it faces with the employer mandate.
For more information, visit www.ameriforce.com or call (800) 522-8998.
1Mathews, C. (2013, June 27) “Why Temp Agencies Are Learning to Love the Affordable Care Act.” Retrieved from www.time.com.