CWA HEALTH CARE REFORM UPDATE: Temporary Workers under Health Reform

How are temporary workers treated under the Affordable Care Act's "Employer Mandate"?

The recent announcement of the delay of the employer mandate noted that simplified rules on how business will report data will be issued this summer. Therefore, it is possible that many definitions and classifications may be subject to change. In the meantime, here are some considerations.

Currently, the ACA has no “temporary” category. Temporary employees may be treated as full-time, part-time, or seasonal, depending on the terms of employment.

Employees working at least 30 hours/week would be considered full-time, and subject to the employer mandate.

“Seasonal employees” can be excluded from the health plan. For the purposes of computing whether an employer is a “large employer,” workers can be excluded from the calculation if they work less than 120 days in a calendar year. For the purposes of applying the per employee penalty, employers are permitted to use a reasonable, good faith interpretation of the term “seasonal employee.” The Treasury and the IRS have indicated that final ACA regulations may tighten the definition of seasonal employee.

Temporary agency employees are treated as employees of the staffing firm, and are treated a bit differently. Staffing firms can use up to a full 12-month look-back period for temporary employees, as long as they are properly classified as variable hour employees.

For more information: Potential Employer Penalties Under the ACA