Subadhra Sriram's Blog

Buyers Beware: You Can’t Avoid ACA Costs

Who’s on the hook for bearing the additional costs of healthcare reform? Buyers and suppliers see the ACA price saga unfolding quite differently.

Buyers of staffing services assert that they are not going to pay for ACA, but that’s very much in conflict with the way suppliers feel about the situation.

According to a recent survey by Staffing Industry Analysts, the majority — 44 percent — of suppliers said that they will pass on the full costs to buyers in the bill rates.

Additionally, twenty eight percent said they would pass it on to both buyers and temporary workers in the forms of higher bill rates and lower wages for the workers. Another 9 percent said they would absorb the cost via lower margins. Five percent said they would pass it on to the temps — read: lower wages. There were some firms, 14 percent, that said their firms have fewer than 50 full-time employees or that their business model relied on part-time/seasonal workers, exempting them from the employer mandate.

But here’s the thing. Assertions notwithstanding, buyers are going to end up paying one way or the other. The choice is either higher bill rates or lower quality temps that these suppliers will send you. Contingent workforce managers have adapted tools like the VMS to efficiently drive margins down. They have negotiated prices to the point where suppliers are operating on very thin margins. It’s not like there’s room for fat. So, note to buyers--be gracious and open to negotiations. If you’re too effective at avoiding ACA costs, you may end up paying it for it in diminished quality.


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Roy Fazio 10/11/2013 07:08 am

The margins in the staffing industry have been driven so low, that there can be no choice but to pass on the costs of the Affordable Care Act to clients. This is especially true for those staffing companies that believe in the need to be compliant with the law and provide insurance to their qualified workers. Our staffing association, ASGroup, has been working for over a year to understand the law using top advisors like Alden Bianchi, Esquire and top insurance brokers to strategically keep the cost at minimum and be compliant with the law. We are entering into a new age in staffing and want to be "cutting edge" in our vision of where we should be. ASGroup is rolling out a self insured, off shore captive, health plan that will be reducing our present costs of health insurance by 40 % or more. We anticipate a pass on to clients of about 18 to 31 cents per hour. Companies interested in learning more can contact me about ASGroup and our approach. Roy Fazio, ASGroup Chairman, (Partner in Protocall Group) 856-667-5129

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