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Home ACA Compliance Understanding ACA Compliance And Utilizing Staffing Firms

Understanding ACA Compliance And Utilizing Staffing Firms

2 minute read
by Robert Sheen
Here’s How To Manage ACA Compliance When Working With Staffing Firms

By now it should come as no surprise that maintaining ACA compliance is a confusing and at times difficult task. We know the basics: Applicable Large Employers (ALEs) with 50 or more full-time (FT) employees or full-time equivalents must offer affordable minimum essential coverage to its FT staff. That much is known. However, what happens when an employer utilizes staffing firms for a considerable portion of its staff?

We have read countless cases dissecting the definitions of “employee” and “independent contractor,” as well as “consultant,” and even “temporary employee.” The boundaries may be clear in a big picture sense but up close the lines are often blurred. In the case of employees hired through staffing firms, you as their “employer” may be questioned on their healthcare despite being the one who “hired” them. Among other possible consequences, as result can be ACA penalties should the IRS conclude that those employees were your employees and thus must have been offered health insurance. There could be a solution to this problem.

Staffing firms oftentimes offer group healthcare plans to its hires that meet affordability and minimum value guidelines under the ACA. So, if you, as the employer, retain that staffing firm, the hires the staffing firm send to work for you already have an offer of coverage that complies with the ACA. This coverage can be considered an offer on your behalf as an employer, should the fee you pay to the staffing firm for the hire’s coverage is higher than the fee you pay the staffing firm if the hire turned down that coverage.

Sounds confusing, but as an employer, the go-to is to calculate the higher fee (the IRS has yet to provide significant guidelines). Further, you may want to secure IN WRITING from the staffing firm that it offers such coverage, and other details to reflect that the staffing firm is ACA compliant.

It may be a tall order for many staffing firms, but, for you to avoid penalties as an employer, it may be the most cost effective way. Should your staffing firm not be willing to comply with the aforementioned, it may be time to seek out a new one.

Summary
Understanding ACA Compliance And Utilizing Staffing Firms
Article Name
Understanding ACA Compliance And Utilizing Staffing Firms
Description
As many employers use staffing firms to fill employment gaps and positions, we must understand how that falls within ACA compliance.
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Publisher Name
The ACA Times
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