Narrow Escape: Threats of Healthcare Penalties Lessen
First, the good news. The federal government issued guidance at the end of August that could significantly reduce employer penalties under healthcare reform. Of course, we are talking about 2014 when those penalties take effect. But if the feds really stick with this, then the guidance would allow employers to use a period of up to 12 months to determine if an employee is full time.
With a 12-month look-back period, only workers who worked full-time for 12 months, and who are still working, would count when figuring employer penalties under healthcare reform, reducing the burden on employers. (Under the reform, employers may face penalties if they don’t offer full-time employees health insurance in 2014 or if the insurance doesn’t meet specific qualifications.)
Here’s the bad news. If you as a staffing firm or buyer of staffing services keep a contingent worker on the books for more than a year, then you may have to provide qualifying healthcare coverage. Now, as we know, neither buyers nor staffing firms expect to pay for it.
Buyers had better start paying attention to those assignment lengths before the year-long limits come into play. And staffing firms don’t assume you are going to pass these healthcare costs on to the buyer. Keep on top of the law and developments in the look-back period.