KB14-018

Question: If a company has temporary workers, but they are employed for a year or two, do they get coded like a full time employee?

Answer: Yes, all hours worked by an employee must be recorded and if they work FT ACA hours in their measurement period, they will need to be offered coverage and a 1095-C generated. The question becomes who would be responsible for offering employees with health coverage if they are deemed eligible. ACA does allow the organization that employs temporary workers to take credit for offers of coverage that the temporary agency may make to the employee. If the temporary agency offers coverage that meets the guideline of the ACA for minimum value and is affordable then the company does not need to worry about an offer. Below is the exact wording of the final regulation:

“… if certain conditions are met, an offer of coverage to an employee performing services for an employer that is a client of a professional employer organization or other staffing firm (in the typical case in which the professional employer organization or staffing firm is not the common law employer of the individual) (referred to in this section IX.B of the preamble as a ‘‘staffing firm’’) made by the staffing firm on behalf of the client employer under a plan established or maintained by the staffing firm, is treated as an offer of coverage made by the client employer for purposes of section 4980H. For this purpose, an offer of coverage is treated as made on behalf of a client employer only if the fee the client employer would pay to the staffing firm for an employee enrolled in health coverage under the plan is higher than the fee the client employer would pay to the staffing firm for the same employee if the employee did not enroll in health coverage under the plan.”

If the employer wants to take advantage of this they must make sure the agreement includes the wording for health care benefits.

Questions/Resources

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• Knowledge Base: https://www.integrity-data.com/hrp/knowledge-base/ 
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Last Review: 5/24/2022 – Revision: 3.0

Applies To: ACA Compliance Solution

Categories:  Hours of Service

Keywords:  Temporary, Staffing