June 2015

Today, the Supreme Court ruled: Key elements of the Affordable Care Act (ACA) stand.

Immediately, this SCOTUS ruling means:

Their paying customers are protected and healthcare and hospital stocks have soared.

Democrats are breathing a big sigh of relief with President Obama saying, “The ACA is here to stay.”

With no proposed alternative in place, Republicans reportedly “noisily outraged and quietly relieved.”

Long term, we still have some questions:

Companies who employ contract employees and the custom staffing industry (who have been through the wringer in an effort to comply with the ever-evolving ACA) still have some fundamental administrative concerns we need definitively addressed so we can comply with the act and reduce burden:

Basically, anything that plays into eligibility needs to be defined clearly, including:

1. How exactly do we define full time versus part-time and variable hour workers versus non-variable hour workers? 

This is one of the most important determinations because full-timers become eligible for coverage. The house proposed changing the definition of full time from 30 to 40 hours a week and bills are being launched all the time to change things.

Similarly, the government has defined a variable hour worker in this way, “An employee is a variable hour employee if, based on the facts and circumstances at the date the employee begins providing services to the employer (the start date), it cannot be determined that the employee is reasonably expected to work on average at least 30 hours per week.”

Can we count on these definitions to be solid? If not, when can we?

2. Clarify what constitutes a break in service: 

The break in service guidelines also affects eligibility. We define a break in service as 13 weeks, but there are some who wonder if it’s 26 weeks. What exactly is the break in service rules and are they apt to change?

3. How will the election year affect us? 

We can only guess. Here are our predictions.

This is last in our series on the ACA and the contingent workforce. Our first three covered lessons from the first five years, what we can expect from the next five years, and our predictions for the election year.

About PayReel

PayReel’s clients, who are some of the biggest companies in the world, are constantly immersed in the chaos of producing multimedia content or executing live events. PayReel makes sure they have the right contractors at the right time in the right place, and that everyone gets paid properly. And, most importantly, they handle every last detail perfectly while making sure their clients think nothing of it, so they can get back to doing what they do best.

There’s not a hotter topic for those in the custom staffing industry than the Affordable Care Act (ACA). It affects everything from hiring independent contractors to budget management. We, along with our corporate clients and independent contractors, are largely affected by every detail, regulation, and modification of the law.

For this reason, we’re tuned in to what happens in DC. When both houses of Congress went Republican, we had the very real question of whether they would repeal the ACA. And not long ago, many also wondered if a Republican White House in 2016 could result in a decisive repeal.

But with over 10 million people enrolled, repeal no longer seems realistic. Regardless of politics, nobody wants to turn on the news and see a story about a politician removing a terminally ill patient from their hospital room. Too many people are benefitting and it would be impossible to ignore the stories.

While we don’t see repeal as a huge threat in the short term, it is realistic to anticipate intense new regulations that could chip away at the act and render it unrecognizable (like the Social Security Act and Voting Rights Act before it).

Whatever direction the White House goes in 2016, it will have HUGE effects. Businesses with contract employees will need to be especially nimble and the software will need to remain flexible.

We can only act on what we know. What we can’t do is ignore it and hope it goes away. If we put our heads in the sand, we’ll just end up with stuffed noses and scratchy eyes.

This is the third in a series:

We’ve already covered lessons from the first five years and what we can expect from the next five years. Next will be the fundamental questions we still need to be answered.

About PayReel

PayReel’s clients, who are some of the biggest companies in the world, are constantly immersed in the chaos of producing multimedia content or executing live events. PayReel makes sure they have the right contractors at the right time in the right place, and that everyone gets paid properly. And, most importantly, they handle every last detail perfectly while making sure their clients think nothing of it, so they can get back to doing what they do best.

1. The Dust Is Settling, But We Still Have Some Challenges

The American Staffing Association (ASA) has worn out the road to DC. Lobbyists have played a big part in cluing DC into the reality of where the Affordable Care Act (ACA) doesn’t accommodate those with nonconventional work arrangements, such as independent contractors and freelancers. These are the workers our world is increasingly made of—folks who may work full time this week, not at all next, and then full time again the week after.

Though we do still have some challenges to work through, the ASA has been a much-needed voice for the custom staffing industry. They’re getting the rules straightened out and it’s working (somebody please send them some flowers).

2. There is HOPE for Automated Eligibility Tracking

As the dust settles, automation has become more feasible. The frequent changes to the act, in its infancy, made automatic tracking problematic. Now that there’s some stability in the guidelines for contingent workers, we’ll be able to add this capability into our arsenal of HR tools.

3. Effects on Costs Still Unclear

With low participation rates to date, there hasn’t been a lot of money on the line. Yet. Penalties for individuals who don’t comply have been minimal. As these get stiffer, we expect participation will increase. As participation increases, administrative costs will, too. This time next year, they could conceivably double.

4. Still Not Sure How To Pay For It

However the costs increase, they’ll be across the board because we’re all bound by the same law. Some clients are struggling because they don’t fully grasp how the ACA could affect their budgets and add to their overall labor costs. The best way we’ve found to think about it is that it’s very similar to managing the cost of worker’s comp.

With a tepid economic recovery, what amounts to another labor tax has been hard for some clients to swallow. Some have said they will only pay a certain additional amount for ACA, and unless someone blinks, it’ll be standing room only at the OK Corral. Meanwhile, a fortunate few increased their budget for contingent labor and are happy that it’s going to cost them less than they may have anticipated.

At PayReel, we will comply with the new law both in letter and spirit. Therefore, we’ve decided we won’t be party to efforts that attempt to manipulate freelancers’ hours to stay just below ACA eligibility.

We’ll do what businesses do best—figure out how to adjust to new business realities.

Note: We covered our lessons from the first five years in our last post. Next, we covered our predictions for the election year. Finally, we’ll soon post which questions we still need to be answered even as the dust is settling. 

About PayReel

PayReel’s clients, who are some of the biggest companies in the world, are constantly immersed in the chaos of producing multimedia content or executing live events. PayReel makes sure they have the right contractors at the right time in the right place, and that everyone gets paid properly. And, most importantly, they handle every last detail perfectly while making sure their clients think nothing of it, so they can get back to doing what they do best.