Provisions of the Affordable Care Act (ACA) have been rolling out slowly over the past few years. Some of the more favorable provisions include children being able to remain on their parents health insurance policies until they reach the age of twenty-six; screenings for diseases like breast, colon, and prostate cancer, among others, are now provided with no co-pay required; and children with pre-existing conditions cannot be denied insurance coverage.
A more controversial provision of the law (delayed from its original January 2014 effective date) will mandate that employers with at least 50 full-time workers (employees working at least 30 hours per week are defined as full-time) must either provide health coverage or pay a penalty of $2,000 per full-time employee.
If your organization may need to increase staff that will put you over the 50- employee limit and you are concerned about the costs of adding coverage, you are not alone. Many organizations have begun preparing for the impact since the government has established a 12-month look back period for the purposes of calculating how much each company is responsible for paying.
Timeline for Compliance Based on Company Size
The above "pay or play" requirements apply only to employers employing at least a certain number of full-time employees (including full-time equivalent employees or FTEs):
- Employers with fewer than 50 full-time employees (including FTEs) are not penalized for not providing health coverage to employees.
- Employers with 50 to 99 full-time employees (including FTEs) are subject to "pay or play," but the requirements will not apply until 2016 for employers who certify that they meet certain eligibility criteria related to workforce size, maintenance of workforce and aggregate hours of service, and maintenance of previously offered health coverage.
- Employers with 100 or more full-time employees (including FTEs) are subject to the requirements for 2015 and must offer coverage to at least 70% of full-time employees (and their dependents, unless transition relief applies) to avoid a penalty for failing to offer health coverage. An employer that offers coverage to at least 70% of full-time employees may nevertheless owe a penalty if any full-time employee receives a premium tax credit.
While no "pay or play" penalties will be assessed for 2014, employers will use information about the number of employees they employ and their hours of service during 2014 to determine whether they will be subject to the requirements effective January 1, 2015. Employers with plan years that do not start on January 1 (non-calendar year plans) may be able to begin compliance at the start of their plan years in 2015 rather than on January 1, 2015.
Viewing Your Staffing Agency in a New Light
As an HR professional or member of Senior Management, you may have worked with a staffing agency to help you with a recruiting need or to augment your staff on a temporary basis. Another way to work with your agency can be to help you better understand the nuances of the new regulations and to craft a staffing plan that can help you grow while maintaining costs.
Temporary Staffing Solutions
At Staffing Plus, temporary staffing solutions offer many of our clients a methodology for maintaining productivity while not adding costs. We work with them to recruit, interview and hire the individuals when they are needed. Utilizing this method, they avoid paying health insurance, which can cost several hundred dollars per month per worker. However, they still have access to the talent they need. Other clients have turned to us to hire people utilizing our temporary to permanent staffing solution. In these cases, our clients are able to hire someone on a trial basis before bringing them on full time. If the individual is not a fit, they have not incurred the cost of providing benefits, which provides some short-term savings.
Flexible Work Models
The ACA requires employers to cover only those employees who work at least 30 hours a week. If your organization has seasonality or peaks and ebbs, where it is inevitable that you will exceed 50 employees, a flexible workforce model may be a great solution. We can help you evaluate your workforce needs and help craft a schedule where some of your staff are working less than 30 hours per week, eliminating the need to provide health coverage, but still meeting your service delivery requirements.
Staffing Agencies as Trusted Advisors
The specifics of the ACA are complicated and navigating the law can be challenging. Staffing agencies are accustomed to providing clients guidance on many HR related issues from how to craft an Employee Handbook, to understanding FMLA requirements. Helping you comply with the ACA can be another area where their expertise can protect you from making expensive mistakes because of a lack of knowledge.
Remember staffing agencies spend all day every day understanding labor laws at both the state and federal levels. They can become a trusted advisor as you are determining your responsibilities with respect to the new law and they can help you manage your staffing needs and ensure you are in compliance so that you avoid costly penalties.
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