PPACA Rules Raising Big Questions from Staffing Firms

Apr 02,2014

The Patient Protection and Affordable Care Act has been a cause of concern for several months now, raising question from employers in every industry; but there are few with bigger questions than staffing firms.

An article from BenefitsPro reports that the most pressing question for staffing firms is whether they or their clients should be considered the “common law employer” of temporary workers, making them responsible for health benefits. Traditionally, this responsibility falls on the staffing firm, but the language in the final rules issued by the IRS has caused some confusion.

The problem occurs in one paragraph where the rules say, “In the typical case in which the professional employer organization or staffing firm is not the common law employer.” Staffing experts have called the wording of “typical case” into question, as it can be seen as subjective.

However, most analysts suggest that the IRS rule is intended to apply only to Professional Employer Organizations (PEOs). Ed Lenz, senior counsel at the American Staffing Association, agrees that the language was intended for PEO arrangements and that staffing companies will continue to be considered the common law employer of temporary workers.

Either way, Lenz says that the best way to minimize risk is to spell it out with contracts that clearly define who the common law employer is.

Read the full article from BenefitsPro here.

By Knowledge Services | Apr 02,2014

Legal & Compliance