On Christmas Eve 2009, the U.S. Senate approved its version of the healthcare reform bill. If included in the final bill, the employer mandate in the Senate version could mean more costs to employers, including users of contingent labor. Here's why.
Under the bill
A company that does not offer healthcare to its employees has to pay a mandated fee if one or more of its employees get a federal credit to buy health insurance.
- Businesses with more than 50 employees that do not offer insurance would pay the government $750 a year, pro-rated by month, per full-time employee.
- Firms that do offer health insurance may still face a fee. If the firm employs a worker who still gets a tax subsidy to buy insurance, the firm would have to pay $3,000 per subsidized worker or $750 for each of its full-time employees, whichever is less.
The bill defines a full-time worker as one who works at least 30 hours per week, per month. So companies that use contingents, even for just a month, could be affected.
An amendment championed by the American Staffing Association clarifies that a full-time worker is one who works at least 30 hours per week for an entire month. If an employee works less than a month, there would not be a monthly fee. Eventually, the Senate bill has to be reconciled with the House version, which had called for an even more onerous mandate of eight percent of payroll.
We suggest that companies keep a watch out for the reconciled version of the bill. It would be a smart move to sit down and talk to your staffing firm about their workers' health insurance costs, because someone will have to absorb them. Are they going to be passed along to you in the form of increased bill rates or will they be shared by the staffing firm? It will most likely come down to an individual negotiation between companies and their suppliers.