Four Ways the Affordable Care Act Will Affect the Staffing Industry

The Patient Protection and Affordable Care Act, more commonly known as The Affordable Care Act (ACA) or ObamaCare, mandates health care coverage for all Americans, including more than 11 million temporary and contract employees hired by U.S. staffing firms each year – a number that is expected to increase significantly in the next five years.

The implementation of the ACA poses a number of questions for the staffing industry, as it will change the costs of doing business. It is imperative that staffing firms across the country understand the implications of the ACA – particularly in regards to penalties incurred by not offering coverage.

With that said, what do you need to know about the ACA, and how can you prepare?

1. The ACA “employer mandate” requires employers with 50 or more full-time or full-time equivalent employees to provide healthcare insurance that provides “minimum essential coverage” to full-time employees. This is a concern for firms that have a healthy contracting business, as W-2 contractors count towards the 50-employee threshold.

How your firm can prepare: Identify the number of full-time employees (defined as employees working 30 hours or more per week) by assessing your contractors’ timesheets and begin to plan for healthcare coverage (or the penalty). How will the additional costs be absorbed?

2. On the other hand, the employer mandate is expected to drive the growth of temporary and contract staffing, changing the workforce model as we know it. Companies may choose to maintain a number of core, traditional full-time employees supported by a larger group of temps or variable-hour contractors in order to avoid the 50-employee threshold.

How your firm can prepare: Take advantage of the growth of temporary and contract staffing and ensure that your back office system can accurately track your contractors’ hours, making the process of classifying FTEs during look-back periods a quicker and less cumbersome process.

3. The ACA will cause an increase in a staffing firm’s cost, which will likely be passed off to the customers as higher bill rates.

How your firm can prepare: Be transparent and keep your customers informed as you address the ACA mandates. Provide them with anticipated rate increases and explain the reasoning behind these increases.

4. Healthcare hiring will increase. If you focus on the healthcare industry, you’re in luck. Demand is expected to increase for nurse practitioners, physician assistants, and diagnostic technicians, in particular.

How your firm can prepare: If you service the healthcare industry, be prepared for an uptick in demand and ensure that you have the fastest and most reliable software out there to fill your open reqs quickly.

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