Allie Ben-Shlomo, COO and EVP of Client Services, PRO Unlimited Print This Page
Inside Sourcing newsletters \ A Checklist for ACA Compliance and the Contingent Workforce
The Patient Protection and Affordable Care Act (ACA) is likely here to stay with the recent landmark King v Burwell decision by the United States Supreme Court. The implications of the law are far-reaching, with 2015 as the first year where the "Pay-or-Play" mandate is in effect.
ACA and contingent workers
Contingent workers pose unique complexities related to ACA compliance, as their employer of record is usually different from the party benefiting their work. Companies engaged with a managed service provider (MSP) or staffing agency that serve as the employer or record for all of its contingent workers - offering benefits commensurate with or exceeding those stipulated within the ACA - may have nothing to worry about.
Regardless, companies using contingent workers must ensure their third-party suppliers have sufficient systems and processes in place to demonstrate proof of compliance and ownership of responsibilities in the event of an audit. Worker misclassification and co-employment scenarios could result in the stiff penalties - both those for misclassification and/or co-employment as well as ACA.
One of the aspects of the "Pay-or-Play" requirements of the ACA is that it will undoubtedly increase costs for staffing suppliers that must ensure affordable coverage for their workers. This may decrease their margins - especially for lower paid workers. Tracking and reporting on compliance is another big cost for both employers and suppliers.
Checklist for ACA compliance
With more than two decades of experience in contingent workforce management, PRO Unlimited has been working with our clients, which includes global Fortune 500 companies, since passage of the ACA to ensure compliance. While the below checklist is not complete, it encompasses some of the more significant aspects of the ACA that companies need to know and moreover ensure that their suppliers have checked off.
The "Final Rule"
The ACA includes a "Final Rule" that places the ultimate onus for compliance on the company (or buyer) using the talent. This means that companies relying on third parties (e.g., MSPs and/or staffing suppliers) must ensure they are compliant with the ACA - or the repercussions could come back to them. Compliance is thus something no company can take lightly.
PRO recently created a White Paper on "The Affordable Care Act and the Impact on Contingent Labor Management" that delves into greater detail on the above checklist of considerations. Owners and stakeholders of contingent labor can download it to assess their organization's ACA readiness and that of their suppliers.