Affordable Care Act Final Rules & More Delays

TEKcareThe Impact on Staffing Companies

February brought another delay in the Affordable Care Act (ACA) with the recent announcement that
enforcement of the penalty phase (4980H(a,b)) is delayed until January 1st, 2016 for companies with 50-99 full time employees and equivalents. This does not affect the majority of staffing companies, but it may include many of their clients and marketing strategies.

At the same time, final rules and regulations were published which provide increased flexibility to Staffing companies in complying with the requirements of the ACA.

  1. Confirmation of the 12 month Look-Back period
  2. Additional guidance for making the variable hour employee determination
  3. Revision of the on-again/off-again employee rule
  4. Relaxing the 95% health plan offer rule
  5. Transitional relief for non-calendar year healthcare plans

The final rules published in the Federal Register on February 12th, 2014 confirm the availability of the look-back period for variable employees of up to 12 months. The aggregate total of measurement + administrative period remains at 13-13 ½ months.

The final rules provide further guidance to employers on determining whether or not their employees can be designated as variable- hour employees. The factors include;

  • Whether employees retain the right to reject the assignments offered by the staffing company
  • Whether employees typically have periods in which no offer of assignment is made
  • Whether employees typically are offered assignments for different periods of time and
  • Whether the assignments offered typically do not extend beyond 13 weeks

The regulations go on to state, “no one of these factors will be considered as determinative”. The rules continue to provide that the determination as to whether or not an employee is a variable- hour employee is based on the staffing company’s reasonable expectation at the time of assignment. If the classification is appropriate based on the staffing firm’s expectation, the employee will be considered as a variable hour employee “even if the employee in fact averages 30 or more hours of service per week over the initial measurement period (i.e. look-back period)”.