Temp Agencies: PPACA Employer Mandate a Bad Fit

Staffing industry representatives are asking Congress to exempt temporary workers from employer health insurance requirements set to take effect in 2014 or at least lighten the load.

The witnesses appeared today at a hearing on the effects of the employer penalty provision in the Patient Protection and Affordable Care Act of 2010 (PPACA) on temporary workers and their employers.

The hearing was organized by the U.S. House Government Affairs and Oversight Committee health subcommittee.

The PPACA employer mandate provision will require employers classified by the government as “large” to offer comprehensive health coverage to permanent, full-time employees starting in 2014 or else pay a penalty.

Employers that offer group health coverage could still end up paying a penalty if the employee’s share of the premiums for the lowest-priced individual plan available exceeds 9.5% of the employee’s income. The Internal Revenue Service has proposed that an employer could assume that the compensation it will be reporting on a worker’s Form W-2 is that employee’s income for health coverage affordability calculation purposes.

Christopher Spiro, managing director for health policy at the Center for American Progress Action Fund, Washington, an organization that supports PPACA, says PPACA and the federal agencies implementing it are trying to be as practical and flexible as possible when implementing provisions that would affect temporary workers and the temps’ employers.

The provision applies only to employers with 50 or more full-time employees, and that means 96% of employers will be exempt, Spiro said in written testimony posted on the committee website.

The provision also exempts seasonal workers and workers who work less than 30 hours per week, and an employer can calculate a worker’s hours either month by month or, in a procedure proposed by the U.S. Treasury Department, by using an average calculated using a look-back period of up to 12 months, Spiro said.