Do Staffing Firms Plan to Offer Coverage to Temporary Employees Under the ACA?
- 11/12/14 |
- 9:20 PM
- 1925 Views
The Affordable Care Act is the most sweeping health care legislation in decades. As you know, on Jan. 1, 2015 the Employer Mandate provision of the Affordable Care Act (ACA) will require large employers (for 2015, those with 100 or more full-time plus full-time equivalent employees) to provide insurance for their workforce or pay penalties. The penalties are severe. J. Kent has decided that we will provide insurance plans to our temporary employees to comply with the employer provisions of the law.
Employer Shared Responsibility Provisions, 4980H – Complex Regulations
Due to the complexity of these regulations, especially the new Employer Shared Responsibility provisions of the ACA (Section 4980H of the Internal Revenue Code); we have taken a very thoughtful and careful approach in determining how to account for the impacts. J. Kent has worked closely with the American Staffing Association’s (ASA) legal expert, Ed Lenz, Sr. Legal Counsel, and nationally recognized ACA benefit consultant, Alden Bianchi to assist with our analysis of the ACA, and we have been an active leader in a coalition of companies that have helped shape the implementation regulations, called the Employers for Flexibility in Health Care. As a result, we have a deep understanding of the legislation and our experts are well-positioned to ensure J. Kent’s full compliance with the ACA.
Yes, Staffing Firms Plan to Offer Coverage to Temporary Employees Under ACA, and
Yes, Staffing Firms Will Incur Significant New Costs
At the American Staffing Association’s annual “2014 Staffing World” meeting in Washington, D.C. this past October, max capacity was reached. The topic of discussion, of course, was Health Care Reform and ACA. Public and privately held staffing firms from thoughout the U.S. in attendance unanimously confirmed that staffing firms will incur significant new compliance costs. As of this writing, many publicly traded and national staffing firms have already sent out rate increase letters to their client base because many companies undergo their annual budget process on a calendar year basis.
YES, staffing firms plan to offer coverage to their temporary employees, however, regardless of coverage offered, staffing firms will incur significant new costs, and those costs will vary depending on:
- Type of work they perform
- Employee’s full-time status and tenure
- Employee’s wage rates
- Type of insurance plan offered
- How many participate in the plan, and
Additional resources needed to ensure compliance to include dedicated:
1. ACA knowledgeable and trained administrative manpower
2. ACA professional expertise (financial, legal, ERISA)
3. New technology to track the complex ACA “variable hour rules” – and how they apply"
4. Annual ACA employer required IRS reporting (both large and small employers)
The Employer Mandate – Costs Spread Across Entire Workforce and Client Base
The “2014 Staffing World” meeting also confirmed that the majority of staffing firms in the U.S. will apply the additional ACA Employer Mandate costs across their entire workforce, and subsequently, across their entire client base. While staffing firms know how many employees are eligible for Health Insurance, no one in the staffing idustry or the health insurance industry knows what to expect as far as the percentage of employee that will choose to enroll in the employer's plan. It is clear, ACA Employer Mandate regulatory costs cannot be fully minimized.
Committed to ACA Compliance
J. Kent Staffing is committed to ACA compliance - both in letter and in spirit. We are also committed to using our expertise to help clients navigate the complexities of the law and to understand the nature and extent of the additional staffing costs they will incur.
J. Kent Staffing is a member of the American Staffing Association. As such, and as set forward in the ASA Statement of Principles, we are dedicated to the legal and ethical management of U.S. workers. We will therefore work diligently to help our clients implement legitimate workforce strategies and will not participate in practices that violate the law’s intent.
We look forward to learning about any questions you may have regarding the ACA and how we may continue to be of assistance as your trusted workforce solutions partner. On behalf of J. Kent and its staffing professionals, we thank you for your business and wish your company a strong 2014 finish.
J. Kent Gervasini, CPC, CSP
President and CEO