The recent white paper published by the American Staffing Association offers insight for companies to better understand how the Affordable Care Act will affect temporary employment, employees, staffing agencies, and their clients. Because of the “play or pay” provision of the ACA many employers are confused about offering insurance for contingent or part time staff.
A Quick Look at What This Means for Employers and Temporary Staff
Determining Full-Time Status.
The Play or Pay provision of the ACA only applies to full time status employees. Companies are not responsible for the health insurance of their part time, temporary or contingent workforce. The ACA allows employers to look back to the last 12 months of employment to determine the average hours worked throughout that period of time.
Look Back Measurement.
Employers can use this established “look-back” method to review the status of employees who are both ongoing as well as variable-hour employees. A variable hour employee is someone whose work patterns are expected to be of an unlimited and uncertain length of time. Other factors include whether or not the employee is replacing a full time employee and whether or not the employee was made aware of the variable hours of the assignment.
Non-Working Temp Employees.
Based on the information currently available the ASA expects that most temporary employees assigned will qualify as variable-hour employees and not be eligible to enroll in the health insurance plan of the agency unless they worked full time during the applicable look back period. This means that temporary employees not currently on assignment will typically not be covered as well.
Exclusions from Penalties.
Other employees may be excluded from the employer health plan including those who have coverage from another source, such as a spouse’s job, or a state Medicaid program. Employees who want to enroll in the healthcare plan that is considered unaffordable or does not provide minimum value can also be excluded.