The Affordable Care Act – What Our Clients Need To Know

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The Affordable Care Act (ACA), while ostensibly providing health insurance to people who might otherwise have had little to no access to it, nevertheless presents a unique set of challenges to employers. Do you forego offering insurance altogether and “pay” the expensive monthly penalty for every full-time employee minus 30, or do you “play” and offer a plan that is both “affordable” and provides “minimum value?” Or, do you choose to offer a plan that is “unaffordable” but provides minimum essential coverage, or one that doesn’t provide the “minimum value,” and pay the penalty ($260 monthly) only for your specific employees who qualify for a government subsidy?

So as you can clearly see, one can criticize the writers of the bill for many things, but leaving businesses without choices isn’t one of them. Even if it’s like the “choice” between stabbing your eyeball with a pencil or gouging it with a hot poker, it’s a choice nonetheless, right?

Staffing agencies like ours face similar choices, of course. In making those choices, we want to weigh what is best for our clients while also considering the fact that if we aren’t in business we can’t help our clients OR our associates! It’s a complicated formula, but the bottom line is we are going to be responsible for providing access to and paying a portion of health insurance for our full-time employees. And at the end of the day, that’s good for you, our valued clients!

In order to best serve and protect our clients, Luttrell Staffing Group has chosen the “play” option. To those employees who are full-time and qualify, we will offer a bronze plan through Med Sure in 2016 that meets both the affordability and the minimum value coverage requirements of the ACA. Our employees who enroll will be required, pursuant to ACA requirements, to contribute 9.5% of their gross pay, and we will pay the difference. In addition, for those who desire extra coverage we will offer an indemnity insurance plan which includes health, vision, dental, life, and disability insurance.

How does this protect our clients? While staffing agencies are generally the “common-law” employer for the purposes of ACA, there may be reasons when a client might be determined to be the common-law employer. In these cases, ACA rules provide that an offer of coverage made by the staffing firm on behalf of their client will count as if the offer of coverage was made by the client.

These benefits, of course, come with significant costs. While we are certainly bearing a substantial percentage of these costs ourselves, in order for us to be able to operate it will be necessary for us to pass some of these along to our customers. To that effect, currently we bill an “ACA Surcharge Premium” on our invoice each week. This will also protect our clients because, if necessary, you will be able to prove that you have, indeed, contributed a portion of the insurance costs for even the temps who worked at your facility.

There are a few caveats, of course. We wouldn’t recommend that a client use a staffing agency to purposefully alter their headcount to fall below 50 full-time employees, nor can an employee work part-time for the client and also for the staffing agency (or use multiple-agencies) to avoid full-time status with either. However, by choosing to full comply with all applicable ACA requirements, we feel we are best protecting both ourselves and our clients from potential negative ramifications.