CWS 3.0: January 9, 2013

Print

Feds Firm Up Proposed Rules for Healthcare Reform

Newly proposed healthcare reform regulations include a “look-back” rule that could reduce the economic hit of the Affordable Care Act on staffing firms and users of contingent labor, but they also include language of concern to staffing buyers.

The proposed regulations are designed to put the goals of the Affordable Care Act into rule form. They aren't final, but they provide further clarification on the look-back than the previously issued guidance.

Under the proposed look-back rule, companies will be able to essentially wait up to 12 months to determine if a worker is full-time and eligible to be counted when calculating penalties — which could exclude many contingent workers. The look-back is important because companies that don’t offer health insurance to their full-time employees — or offer insurance that doesn’t meet certain qualifications — can face an annual penalty of up to $2,000 multiplied by all their full-time workers.

However, there are also some concerns over the proposed regulation. George Reardon, special counsel for employment law firm Littler Mendelson, cautions the proposed regulations emphasize the common law test of the employment relationship. Such a test could prove disruptive for staffing buyers and staffing firms.

“Although the regulations openly acknowledge the existence and function of the staffing industry, they also cite to existing regulations that, by focusing almost exclusively on the right to supervise the employees’ work, could be used to classify many staffing employees as common law employees of the customers rather than of the staffing firms.” Reardon wrote. “This approach could be extremely disruptive to staffing firms and their customers, and it will be worthwhile for staffing firms and their customers to give increased attention to the substance and the appearance of the co-employment relationships they maintain.”

For an article by Reardon on the proposed regulations, click here.

To view the proposed regulations, click here.

A public hearing on the proposed regulations is set for April 23 with a deadline for written comments on March 18.

Comments

Add New Comment

Post comment

NOTE: Links will not be clickable.
Security text:*