Affordable Care Act Effective from 2015! | DCR Workforce Blog

Affordable Care Act Effective from 2015!

affordable healthcare actWhen the US Department of Treasury released the news that implementation of the Affordable Care Act will be delayed by a whole year, the reactions were a mixed bag. While some feel strongly that the extremely complex statutory provisions and requirements of the law itself need serious modifications, let us see what each of the players gets out of this postponement.

Employers:

  • Heaved a sigh of relief as they took a breather from the hectic plans they were making – in preparation for the original deadline.

Healthcare Insurers:

  • Insurance companies have never really worked out the logistics of providing health coverage to temporary workers whose employment opportunities, tenure and long term prospects are unpredictable – making it difficult to calculate the cost and feasibility of providing temporary workers with comprehensive coverage on a regular basis.

Staffing Firms:

  • Staffing firms which may not offer regular health insurance to contingent workers, except in exceptional cases, can continue to not do so for one more year. The “mini-med” insurance policies offered by them to the workers would have been rendered insufficient by the ACA. The extension gives them an opportunity to negotiate better deals with the insurers.
  • The stock prices of staffing firms, in the public domain, have been rising in anticipation of increased market opportunities thanks to the ACA.  Many believe that the use of temporary workers will increase as employers seek ways to avoid the added financial burden of this legislation.  Immediately following the announcement of the delay, these stocks experienced a 1%-5% decrease.
  • Staffing firms are also unsure of the calculations required to decide whether a temporary worker can be classified as full time or part time under the provisions of the Act. They also need to know for sure that they will not be liable for penalties if they fail to provide the insurance to workers within 90 days of their joining date.  “Play or Pay” and “Affordability” regulations carry severe penalties to those who fail to correctly classify their workers as full time or part time. Delayed implementation may provide additional time to clarify the rules as they apply to contractor assignments that may vary in length and also vary week to week in hours worked.
  • Staffing firms could see a reduction in attrition as the 12 month look-back period for the provision of health insurance may make many contract workers eligible for health benefits, removing one of the greatest negatives associated with temporary work. .

Over the next year, a great deal of work is needed to clarify the application of the ACA to workers contracted through staffing agencies.  While the government is focused on identifying companies trying to skirt the law by reducing their ‘permanent’ employee headcount to less than 50, host companies and their staffing suppliers struggle to interpret which contract workers receive benefits under the ACA.  This legislation, and other similar legislation, fails to recognize the rapid adoption of contract workers as a strategic component of most companies’ workforces.  Most staffing agencies are committed to providing the best possible working conditions for their contractors.  Satisfied workers translate into completed engagements and high reassignment rates, which translate into increased profits.  Legislation must explicitly and clearly address this population so that well intentioned companies can fully comply with both the letter and intent of ACA.

On our part, we can only assure you that we will keep you updated on any significant changes, even as they happen.


Disclaimer:
The content on this blog is for informational purposes only and cannot be construed as specific legal advice or as a substitute for competent legal advice. They reflect the opinions of DCR Workforce and may not reflect the opinions of any individual attorney. Do contact an attorney for advice specific to your issue or problem.
Lalita is a people/project manager with extensive experience in operations, HCM and training and development across industries like banking, education, business consulting, BPO and information technology. She believes in a dynamic approach to life and learning as change is the only constant.