ACA Compliance and the Staffing Industry
Staffing agencies have a constantly changing employee base, which presents unique challenges when it comes to ACA Compliance:
- Workers move in and out of the system over the year
- Hourly tracking may be difficult when employees are on-site
- Benefit eligibility and affordability must be determined for different populations
- Agencies must accurately track termination and re-hire dates
Prior to the Affordable Care Act (ACA), staffing agencies were not required to offer health benefits to their temporary employees, or “candidates”. But with the new ACA requirements, there are some really important considerations for tracking hours for candidates.
Agencies now have to carefully track termination dates and rehire dates, which they probably didn’t capture before. Tango recommends that agencies set a 12 month measurement period for tracking employees. The 12 month period is the longest that the ACA allows, and offers simplification for these organizations. By choosing this measurement period, agencies are given the best possible view of hours worked, and as a result the best view of which employees are going to be eligible for benefits.
Once a candidate is offered benefits based on eligibility, they are still monitored over the next measurement and stability period. If the candidate has a break in service, the “Return to Service” rule may come into play. The “Return to Service” rule states that if the employee has had no hours of service for 13 weeks, the employer can mark them as a rehire and start a new measurement period to determine eligibility. If that period was less than 13 weeks, the employee maintains coverage.
In the case of a candidate whose assignment ends, the agencies we work with have chosen a 12 month termination – meaning that once the candidate has not had any hours for 12 months, benefits coverage is dropped and the termination is tracked.
Staffing agencies may offer one set of benefits to their in-house employees, and another to the candidates. This complicates things for HR teams who have to keep track of all of the details – the plan years, the differences in the multiple plans, etc. Also, regardless of how many benefits plans are offered, all must meet ACA requirements for minimum essential coverage and minimum value to avoid fines – so it may be time to carefully assess these plans.
Since candidates may come in and out of an agency’s workforce, it’s important to capture all of the relevant dates and track which employees are eligible for benefits. There’s a great deal of complexity in the process, so following the guidelines and tracking the data is key. Because of the transient nature of the employees in this industry, it’s especially important for these groups to act now on getting compliant. Gathering the data on a wide range of employees is challenging for any organization, but when they come and go with this kind of frequency, it’s even more complex.
Need help with the ACA? Tango Heath offers a full-service ACA Compliance & Reporting solution and specialize in large, complex businesses. Learn More About our ACA Solution.
Categorized in: ACA