Play or Pay and Staffing (Part 1)
The Affordable Care Act (ACA), enacted in 2010, has set many new rules in place for all of those associated with healthcare. Many of these rules are debated and questioned on what their impact within the field is, as they are not as clear as most would like them to be. One of those for the staffing world is the “play or pay” mandate. With deadlines approaching in the next few weeks for some, there are still many questions as to how staffing firms and clients should prepare for these changes.
The “Play or Pay” mandate states an employer with at least 100 full time employees or equivalents will offer healthcare coverage that meets the standards of the new law or the employer will be charged a penalty. This law goes into effect January of 2015. Companies with 50-100 employees will also be under this mandate; however they have until 2016 to get these benefits in order.
There are two components to the mandate. These are discussed well in this article by Lexology. Section 4982(a) or the “A Penalty” states an employer that fails to offer the “minimum essential coverage” to at least 70% of their employees and dependents will pay $2000.00 a year for each full-time employee (including those who were offered coverage). Even if the employer offers the above, to the threshold number of full time employees, they may also be subject to Section 4982(b) or the “B Penalty”, if they do not offer coverage to all full-time employees or it is unaffordable or does not provide “minimum value”, and the full-time employee receives a premium tax credit. This penalty is $3,000 annually for each full time employee who receives the tax credit or the amount of the “A penalty” whichever is less, prorated on a monthly basis.
These penalties can add up quickly if you are not sure on what they mean for your company. In the staffing world there are several scenarios that could make it confusing on what full time employees mean for you and your clients which we will discuss some of in another blog post coming soon.
What the full effect this new mandate will have on the healthcare industry is yet to be seen. There is speculation of many things. One question is if there will be more clinicians needed to take care of the extra-insured people. More people with insurance, means more people regularly visiting healthcare facilities, which can lead to an increase in staffing needs.
Play or Pay and Staffing