There’s been a lot of talk in the media about how the Affordable Care Act (aka ACA) may affect the business side – be it an entity employing contingent workers or the staffing company supplying contingent workers. But little has been said from the contingent worker’s perspective. I’d like to shed a little light on the subject and hear from the market.
When the ACA, also known as Obamacare, went into effect, many growing organizations were worried about the repercussions, since the Act states that companies with more than 50 employees must provide insurance to their employees. There were varying opinions of how this law would affect the workforce.
Of course staffing agencies knew it would directly impact the industry. But how has the ACA affected the contingent worker?
For starters, all individuals are now mandated by the ACA to acquire health coverage or pay a penalty that will increase over time. Additionally, the Baby Boomer population is aging. Every day, 10,000 Boomers are crossing their 65th year, and they’ll continue to do so for the next 19 years. As this age group is prone to impending potential chronic health conditions, there’s no doubt that they’ll require better healthcare. Many in this group continue to work, often as freelancers or part-timers in some capacity, often to get the money to pay for health care.
For simplicity’s sake, let’s just assume that there is a contingent worker classified as full-time. The staffing firm is the responsible party for complying with the mandates of the ACA. So now those contingent workers who formerly may have been going without health care are going to be offered health benefits.
This is a huge boon for contingent workers. According to a report titled “Contingent Workforce: Size, Characteristics, Earnings, and Benefits” presented by the U.S. Government Accountability Office, contingent workers were less likely than employees to have either private or work-provided health insurance (27.0% of contingent workers versus 57.8% of traditional employees).
The Act initially set out to address the fact that, according to the 2010 Census, there were 49.9 million Americans (or 16.3%) whose healthcare status was uninsured. We’re also told that Americans die every year due to lack of health insurance, and 62% of all bankruptcies are filed by people whose medical expenses went too high.
As contingent workers are expected to equal employees by 2020, the new economy and the ACA can make self-employment more attractive. And it will be interesting to watch the impact the ACA has on the increasing reliance on contingent workers, if there is an increase in life span with the mandated health care as well as the effect on medical bankruptcies.
At DCR, we’ll continue to watch what effect the ACA has on employers, staffing suppliers and contingent workers and report our findings.
If you’re a contingent worker, have you seen a positive or negative effect from the ACA?
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