The Patient Protection and Affordable Care Act, also known as the PPACA or simply the Affordable Care Act (ACA), was originally introduced into U.S. law in 2010. While the initial rollout was focused more on patients and employees, the employer-mandate portion of the ACA did not take effect until January 1, 2015. While even this was delayed, the full provisions of the statute are now in place across the country.

Key Provisions

There are numerous key provisions in the ACA that specifically affect temporary agencies and staffing firms. For starters, enterprises with 100 or more full-time staff members, including personnel listed as full-time equivalents, must offer minimum essential coverage to all of their full-time staff members as well as any dependent children under the age of 26. Failure to abide by these rules will solicit specific penalties for nonconformance. In order to meet these specifications, some companies are now relying heavily on temporary agencies to fill their workforce.

Look-Back Period

One of the ACA’s caveats that apply directly to staffing companies is the look-back period. This metric refers to the number of hours a staff member must work within a full-time position, which is usually at least 30 hours per week, before their employer must offer minimum essential coverage. An employer who fails to provide minimum essential coverage to at least 70% of their full-time staff members will be subject to a specific tax, which amounts to $167 (up to $2,000 annually) per full-time staff member. However, the first 80 full-time staff members are not included in this count.

Personnel agencies and staffing companies can take advantage of the 12-month look-back period in order to identify their own full-time employees who are eligible for minimum essential coverage. However, the look-back rule can only be applied to new variable-hour workers, seasonal staff members and employees who have maintained at least one year of experience with the same organization. A worker is considered a variable-hour employee when their status as a full-time employee can be reasonably established, which usually occurs when temp workers take on multiple short-term assignments with different companies.

Negative Impact

Unfortunately, there is a negative impact associated with the ACA. Because of the new stipulations, the cost of staffing and recruitment services is expected to see an increase in 2015. As a result, most temporary agencies will have no other choice than to pass these additional costs onto their customers, which may come in the form of higher customer bills, increased service rates, lower employment wages or any combination of the aforementioned.

In Conclusion

The ACA is still a work in progress. As such, it’s bound to see some changes and revisions in the future. It is important that staffing agency and temporary recruitment firms are aware of the ins and outs of the statute, including any future revisions. Since monitoring and interpreting the ACA can be a highly complex task, some may want to consider legal or professional assistance, such as the services that are available through a dedicated ACA compliance officer.

Automation Personnel Services has the resources to help fill vacant job positions, manage your payroll and a number of other services.  Contact us today to work with one of the top staffing firms with offices throughout the United States.