With the enactment of the Affordable Care Act, employers have been confused about its impact on staffing firms. Now that the final rules have been released, there is a clearer picture of how this act affects staffing firms and their employees.
- In most cases, the burden of adhering to the ACA falls on the staffing firm, not on the client. Staffing firms typically qualify as a common-law employer because they handle functions such as recruiting and hiring employees, paying wages, benefits and taxes, and terminating or reassigning employment. In rare cases, the client may be the common-law employer. If this is the case, the staffing firm can offer coverage on behalf of the client and maintain that plan.
- Temporary employees may work 30 hours per week on an assignment but then have a period in which they are not employed. In this case, the firm may be able to treat the employee as a variable-hour employee, allowing it to evaluate the employee’s hours during a look-back period of the initial 12 months of employment before offering health care coverage if the employee averages at least 30 hours per week. In addition, the final ACA rules allow employees with a break in service of as little as 13 weeks to be treated as a new employee, with a new look-back period.
- The final rules state that the look-back period, including the use of the initial measurement period for a newly hired employee, can be applied to seasonal employees the same as it is to variable-hour employees. Seasonal employees are those in positions for which the customary annual employment time is six months or less during approximately the same time of year, such as summer or winter. However, employees can still be considered seasonal even if their employment is extended longer than its typical duration. For example, a lifeguard might work for six months during the warm months but be asked to work longer during an unseasonably warm summer.
For more information the impact of the Affordable Care Act for employers, visit www.healthcare.gov.