Employers all across America took a collective sigh of relief last week when the Obama administration announced that the employer mandate portion of the Affordable Care Act (ACA) would be postponed until 2015. But the decision could leave some recruiters wondering how this will affect their firms, many of which stood to benefit from the mandate.
The employer mandate was to require employers with 50 or more employees to provide healthcare insurance to those employees by January 1, 2014, and it also came with a number of reporting requirements. This mandate was a mixed blessing for recruiters. For larger recruiting firms, it presented a challenge as they themselves were at risk of falling above the 50-employee threshold and having to provide insurance to their contractors. But for most recruiters, it provided an opportunity to get more contract staffing business as more companies turned to contractors to stay below the 50-employee threshold.
But now, according to a blog on the U.S. Department of Treasury website by Assistant Secretary for Tax Policy Mark Mazur, the reporting requirements under the employer mandate have been postponed to 2015. That means the government will not be able to determine which employers are not providing the required coverage and cannot assess penalties, so the requirement to provide insurance is effectively also postponed until 2015.
So where does this leave recruiters? Well, if you are a large firm that would fall under the employer mandate, you technically don’t have to provide insurance until 2015. However, Mazur urged employers to voluntarily implement the reporting requirements in 2014 to prepare themselves for 2015. Also, the delay does not relieve you of the obligation to notify employees about the existence of healthcare exchanges, or “The Marketplace.” You must still provide the required notice by October 1, 2013.
For recruiters who are not subject to the employer mandate but were hoping to benefit from it, stay the course. You should still discuss the healthcare reform law with clients and the eventual impact it will have on their costs and administrative burden. There is no indication at this time that the employer mandate will be repealed, so they can’t lose anything by preparing now. In fact, they can immediately start reaping the other benefits of contract staffing: workforce flexibility, reduced legal liability, the ability to “try-before-they-buy” through contract-to-direct arrangements, etc.
The bottom line is that all recruiters should stay on top of this law and the impact it could have on your clients. Companies often look to recruiters as employment experts and may turn to you for advice on how to best navigate the law.
This article is for informational purposes only and should not be construed as legal advice.