August 01, 2013

Mission 2015: Buyers - Get Ready, ACA Ahead

Though the Patient Protection and Affordable Care Act’s (ACA) implementation is pushed back to 2015, the issue regarding health care reform for the contingent workforce remains a vital issue for temporary worker buyers and suppliers.

There are mixed expectations between buyers and suppliers regarding who will pay for the increased costs.

According to the 2012 Contingent Buyer Survey, most buyers do not expect to absorb any of the costs of healthcare reform. IT buyers, tech/telecom and buyers with 10 or more suppliers are among those who think that their suppliers will absorb healthcare reform’s costs.  Meanwhile, data from Staffing Industry Analysts’ surveys show that 60 percent of staffing firms expect to pass on the costs of the healthcare reform to the buyers.

Staffing firms that employ fewer than 50 full-time equivalent employees are exempt from the employer penalties under the ACA, but the companies must still track workers and prove the exemption.

For companies with more than 50 full-time equivalents there will be a category of temporary labor of a short-term character that will also be exempt.

Companies that do not provide healthcare to their full-time employees are subject to a $2,000 fine per each full-time employee (after the first 30 workers).

Some staffing firms are considering offering cheaper and limited forms of insurance that may cover only doctor visits and prescriptions. Such plans would allow firms to avoid the penalty. Other anticipated measures by staffing firms include increasing markup or bill rates to offset the costs of providing healthcare coverage and transitioning lower-skilled workers to shifts of less than thirty hours per week.

According to the 2013 Contingent Buyers Survey by Staffing Industry Analyst, some buyers are planning on engaging fewer independent contractors and more statement of work (SOW) and outsourced workers. However experts wonder if such a tactic would fully address ACA concerns. The American Staffing Association expects buyers to modify their standard 40-hour workweek to address cost increases. We also foresee contingent buyers actively seeking relationships with agency contractors who are taking responsibility for ACA concerns by offering a healthcare plan that meets the stipulations of the regulations.