In our previous post we discussed the penalties in the ACA’s “Play or Pay” mandate, and how they applied to different types of business by size. How do we know if those penalties could apply to those you are Staffing or not?
The Final Rule in the ACA equates a full time employee as one that works 30 hours or more a week, or 130 hours a month. Determining whether this is true for each employee is critical for analyzing potential penalties. However though the Final Rule gives many details and directions how to calculate the 30 hour threshold, it does not give a lot of guidance regarding whether or not the worker is actually an employee.
There are two situations to look at that are discussed in the Final Rule:
• Temporary Staffing Firms: Is by IRS standards, under all facts and circumstances, the common law employer and responsible for the employer mandate. But the confusing issues here could be whether someone is a variable hour employee, and the Final Rule dives into that further.
• Professional Employer Organization (PEOs) or Other Staffing Firms: When the staffing firm is not the common law employer of the worker, they can still offer health coverage on behalf of their client as long as they receive payment and an extra fee for satisfying the clients employer mandate.
Each of these situations also may have a different staffing model that would change the circumstance and make them responsible for the 4980H penalty if they are the common law employer. Further showing us that the ACA mandate has many possibilities and should be evaluated for each individual entity as one model may not fit for another.
Now that 2015 is upon us, and these rules are in effect for some it is important for you to carefully evaluate your practices to make sure that you are in compliance so as to avoid future penalty.
Play or Pay and Staffing (Part 2)
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