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Use Staffing to Comply with the Affordable Care Act



Staffing Agencies Can Help Your Business Comply with the Affordable Care Act

The Patient Protection and Affordable Care Act (ACA) will take full effect in 2014.

Is your business prepared?

If your company has more than 50 full-time equivalent* employees:

  • It will be classified as a “large business.”
  • You will be required to offer government-approved affordable healthcare to a minimum of 95 percent of your full-time employees and their dependents.
  • The cost for that coverage cannot exceed 9.5 percent of your employees’ household income.

As a large employer, you have to make the decision to “pay or play.”

  • Pay: You opt not to provide healthcare insurance, and you will pay a fee of $2,000 per year for each full-time employee on your staff (less the first 30 employees).
  • Play: You agree to provide health insurance, and you will only pay a fine if you have employees who get tax credits for exchange coverage (the fine is $3,000 per employee that receives the credits).

As a responsible employer, you need to develop sound compliance strategies to minimize the ACA’s impact on your bottom line. On the following pages, you’ll find several strategies your company can use to keep business humming along profitably–while remaining compliant with Affordable Care Act provisions.

* Full-Time Equivalent = Total # of hours worked by all employees (full and part time) over a defined measurement period of one to twelve months / (30 x the number of weeks in the measurement period)

How does a staffing company help you reduce ACA liability?

  • Using a staffing firm transfers the responsibility for healthcare insurance from your firm to the staffing company.
  • The Affordable Care Act contains fairly complex provisions for monitoring compliance. If you employ a large number of part-time or variable-hour workers, compliance management can become very costly. Outsource this responsibility to a staffing firm by using temporaries or payrolling staff through a staffing firm.
When does it make sense to use temps?
  • Seasonal work. Many employers, from agricultural to manufacturing to accounting, have big seasonal jumps in their volume of business. Rather than staff for these peaks, maintain a smaller, core workforce, and supplement your team with temporaries as needed. You’ll reduce your payroll and exposure to ACA and other employment liabilities.
  • Projects. Bring on workers with skills that may be hard to come by or needed only for specific projects. (For example, a new software or hardware implementation that may require workers with a high level of technical skills for a defined period of time).
  • Support rapid growth. If your business is experiencing rapid growth, supplement your team with qualified temporary workers until you can determine if the increase in demand requires full-time hires.
  • Reduce hiring risk. Take advantage of temp-to-direct services to “test out” new employees before committing to a hire. This way, the new employee is not on your payroll until you are certain that you want to make a hire.
  • High-turnover positions. Temporary workers are ideal for highly transient positions. You can gain more flexibility in hiring and termination without the overhead of managing compliance for these workers.

Temporary employees are ideal whenever you have a short-term or uncertain hiring need. By staffing more strategically, and matching your workforce to your workflow, you can dramatically reduce your labor costs and employment liabilities.

Consider Payroll Transfer Plans with a Staffing Company

  • Temps are employed by the staffing company, not your firm.
  • The staffing company bears payroll, statutory taxes, workers’ comp, and benefits expenses, which will include healthcare as of next year.
  • When you hire a new employee, they will be entitled to receive benefits day one.* When you bring in a temp, all the costs of employment are covered in the hourly bill rate.

* Under the Affordable Care Act legislation, new full-time employees must be offered healthcare benefits within a defined administrative grace period. However, there is a new classification of worker, the variable-hour worker, for which a more complex formula has been developed to determine if and when they are eligible for benefits.


CPS and Professionals Incorporated are committed to being thoroughly knowledgeable about the Affordable Care Act.  ACA legislation is still being defined and there are still a number of unanswered questions about what is required for both employees and employers. We are obtaining the most current information as it is released and would be happy to consult with you about how this law may affect your business. Call us today at (315) 457-2500 or send an email to sales@cpsprofessionals.com if you would like us to keep you up-to-date on what services our firm may be able to provide to you during this transition.


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