PPACA INFORMATION SHEET
PPACA INFORMATION SHEET


PPACA INFORMATION SHEET
The Patient Protection and Affordable Care Act (PPACA), taking full effect in 2014, brings big changes to the health insurance plans businesses must offer. It is important to make sure you know the facts about the PPACA and understand the options a staffing agency can provide, so that your firm is fully prepared for the new legislation.

Basics of the PPACA
  • If you have 50 or more full-time or equivalent employees, you are subject to the Employer Shared Responsibility provisions and must offer an affordable healthcare plan to at least 95% of your employees and their dependents.
  • The cost for coverage cannot exceed 9.5 percent of the employees' annual wages.
  • The government has designed specific formulas for calculating the number of "full-time" employees you have. For example, 40 full-time employees (employed 30 or more hours per week on average) plus 20 half-time employees (employed 15 hours per week on average) are equivalent to 50 full-time employees.
  • Under the PPACA, each state will be required to run a Small-business Health Options Program (SHOP) exchange, an online marketplace that will allow businesses with up to 100 employees to offer health insurance at rates similar to those available to large corporations. If a state decides not to set up a SHOP, the federal government will step in and provide one.
  • If you fail to comply with the PPACA guidelines, your firm can face penalties of up to $2,000 per employee.
Benefits of using a staffing agency
  • A staffing agency can help you minimize benefit expense by utilizing contracted employees.
    • Contracted employees are considered to be self-employed for tax purposes, and do not count towards your employee count under the PPACA.
  • Temporaries are employed by the staffing company. As such, the staffing company is responsible for providing their employees with health benefits, if applicable--not you.
    • Temporary and contract employees can handle the ebbs and flows of your business.
    • Temporary employees can be brought in for short-term assignments instead of hiring full-time employees who affect your headcount under the PPACA.
    • Seasonal work is suitable for temporary employees, and you can easily release them after your rush season is over without having to offer benefits.
    • Contract workers can provide specialized skills for discrete projects and long-term assignments without impacting your headcount.

The Bottom Line: Careful planning with your staffing partner can help you can minimize impact on your bottom line from increased benefit costs, while remaining compliant with upcoming changes to the law.