When the Affordable Care Act (ACA) passed, we in the contingent labor industry held our breath. As a company providing contractor management services, we wondered: How will this affect temporary, freelance employees and the businesses that employ them? Will ours and clients’ costs skyrocket? Will we be able to accommodate the demand?
What we learned:
1. Contractor Compliance is HARD
It became immediately clear that those who wrote the Affordable Care Act (ACA) didn’t consider how it would work for contract employees. The law was vague regarding full time, part time, or seasonal workers. It didn’t have a specified look-back period. With an act as clear as mud it was impossible to find our path. Our very first steps were to read and wait …wait and read.
As the mud started to clear, we had to comply. We wanted to comply, but as soon as the ink dried on a rule, it’d be redefined. Our muddy path became a constantly-changing, muddy path.
The act made it far from easy for a contingent workforce or the businesses that employ them to understand and follow the rules. But with a mandate for large employers that required compliance by Jan. 1, 2015, we had to figure it out. We positioned ourselves the best we could to guess right. It was basically, “Put on your shoes (and a blindfold) and start walking. We’ll be sure to fine you if you fall off a cliff. Go.”
2. Excel Doesn’t Excel
With the frequent changes, there was precious little software in existence designed to keep track of guidelines for independent contractors automatically. We used Excel. Every month, we did a census of our employee base and entered info into spreadsheets to determine eligibility. As the rules changed, our spreadsheets changed. Even though no one fell through the cracks, we opened ourselves up for fines and penalties. Excel is quite a tool, but manual tracking of that level of data is not ideal. As the dust settles, we’ll find the right solution.
3. Participation Was Lower Than Expected
Once we got through open enrollment (a photo finish just before the deadline), we were surprised by low levels of participation from our employee base. It turns out over half of freelancers have coverage through some other means (through spouses, for example).
With the manual tracking required, it helped that we could start small.
4. Participants Are Grateful:
Some participants spent their adult lives essentially uninsurable and avoiding the doctor because they couldn’t afford care. It’s gratifying to hear stories of people who’ve had ongoing health problems or pre-existing conditions who are eligible for coverage for the first time in their adult lives. One woman, whose seriously-ill husband became insured for the first time, cried as she expressed her gratitude to us.
The pain of manual tracking fades in light of these stories.
This series includes what we can expect from the next five years as well as our predictions for election year. Next we’ll cover the fundamental questions we still need 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.
