Who’s responsible for offering coverage under ObamaCare?
The Patient Protection and Affordable Care Act has implications for employers who use temporary staffing to help fill their workforce needs.
A new “shared employer” responsibility mandate goes into effect on Jan. 1 as a part of the ACA.
Here’s what we’re talking about:
Traditionally, employers who turn to staffing agencies for temporary employees pay a fee to the staffing agency and are paired with an applicant. The staffing agency then pays the applicant, the associated taxes, and in some instances will offer benefits.
Until now, there has often been no question that while the applicant may work on projects for the company hiring them through the staffing agency, the staffing agency is the employer and is responsible for complying with the laws pertaining to employee/employer relationships.
With the introduction of the “shared employer” responsibility provision of the ACA, employers with more than 50 full-time employees must offer health insurance to their employees.
While determining who is responsible for offering coverage to employees hired through a staffing agency may seem straightforward, what we’re seeing from the IRS and the Department of Labor suggests that it may not be so simple.
In order to make this determination and establish who is responsible for providing health coverage or paying the associated penalties, the government may use the common law employee test traditionally used for determining Social Security liability.
Using this test, employers may find that temporary employees whom they thought were the responsibility of a staffing agency may actually be their own legal employees.
The common law test is subjective and several factors should be taken into consideration. But the two primary factors are determining who controls what must be done by the employee and how it is done.
The bottom line? It’s important that employers are certain about who will be responsible for providing coverage to workers working more than 30 hours per week.
With the use of the common law employer rules, many companies may have more employees than they realize and find themselves out of compliance with the ACA.
We advise you not to wait to find out. Call us today so that we can help you sort through these questions.
NOTE: Apprentice Personnel will be hosting a seminar on what the Affordable Care Act means to our clients. Call Megan at 719-473-5800 for details.
About the Author
Will has enjoyed a 20-year career in leadership positions in the hospitality and travel industry throughout the U.S. with the Hyatt, Sheraton, Hilton, Renaissance and Steamboat Ski and Resort corporations. Will received a Bachelor of Science degree from the University of Massachusetts at Amherst. From 2000-2007, he served as President and CEO of the Greater Colorado Springs Chamber of Commerce. He also served as Vice President-Special Projects for the University of Colorado Foundation from 2007 to 2009. Will is a past Chair of the Board of Directors of the National Homeland Defense Foundation and former member of the United States Chamber of Commerce Committee of 100. He is married to Nan, has five wonderful children, and enjoys coaching, traveling, hiking, golfing and skiing.