CWS 3.0: September 5, 2012

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Healthcare Reform Guidance Could Reduce Penalties

New guidance put forth by the federal government last week could significantly reduce employer penalties under healthcare reform when they take effect in 2014. That could mean savings for staffing users if such penalties are substantially reduced.

The guidance would allow employers a “look-back” period of up to 12 months, the American Staffing Association reported on Tuesday.

Under “look-back,” employers could use a measurement period of up to 12 months to determine if an employee is full time. That means staffing firms would only be penalized based on employees who worked full time (average of 130 hours per month) for 12 consecutive months.

This could greatly reduce the number of contingent workers who would be counted as full-time for the purposes of assessing penalties. Healthcare reform penalties come into effect if an employer doesn’t offer health insurance or if the insurance doesn’t meet specific qualifications.

On the other hand, a look-back period would require a “stability” period immediately following it. Any worker found to be full-time during the look-back period would remain a full-time employee for at least the next six months regardless of whether he or she continues to work full-time hours.

Ed Lenz, senior vice president, legal and public affairs, at the ASA, said the guidance is not regulation at this time, but the government indicated firms could rely on it through 2014. The ASA will continue working with the Treasury Department.

“This is a terrific development,” Lenz said. “There may be additional wrinkles that need to be worked on for us, but we’re pretty confident we are moving in the right direction.”

For more on healthcare reform penalties and their impact, see the April 2010 issue of the Legs & Reg Advisor.

For more on healthcare reform, as reported in the latest issue of Staffing Industry Review magazine, click here.

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