15 Oct Limited Time for Staffing Agencies to Choose ACA Coverage

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Although Halloween may be right around the corner, the date striking fear in the hearts of staffing agency owners around the country is actually January 1, 2016. That date marks the arrival of the full brunt of the Affordable Care Act (ACA) for businesses with 50 or more full-time employees.

Beginning on January 1, 2016, all businesses employing 50 or more full-time employees (that is, employees who work 30 or more hours per week) or the equivalent (check out this calculator to determine your number of FTEs), must provide access to ACA-compliant health coverage for at least 95% of those employees and eligible dependents. Failure to do so can result in the risk of paying stiff penalties to the IRS. Penalties vary from a maximum of $2084 per full-time employee (minus the first 30) for not providing any coverage to $3126 per employee who receives a subsidy to purchase coverage in the public marketplace for any of 3 reasons:
1) Coverage offered was not affordable (no more than 9.5% of the household income);
2) Coverage offered does not provide minimum value (plans must cover 60% of total allowed costs expected to be incurred under the plan);
3) The employee was not offered coverage at all.
If your staffing agency is still on the fence regarding whether or not to provide coverage, consider this: the cost of providing insurance coverage to your employees is a tax-deductible expense; penalties paid to the IRS are not. Paying penalties is the equivalent of simply throwing money away.
It’s not too late to select healthcare coverage for 2016, but you should act now! You should be doing your research, getting quotes, and making your final decision by November 1 in order to allow for successful open enrollment period during which you can educate your temporary staffing employees on their options and give them time to accept or decline coverage. Your employees may accept or decline coverage, but by providing the option of ACA-compliant health insurance to at least 95% of your eligible employees, you protect your company against the penalties and can earn the goodwill of your employees who now have a viable health insurance option.

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