Some of these requirements have put staffing firms and W-2 Employer of Record services between a rock and a hard place. Many have had to adjust service pricing, minimum pay rate requirements, and healthcare options to comply with the new rules.
Affordable Care Act Requirement
- The IRS’s Affordable Care Act requires that employers with 50 or more employees* (ALE’s) must:
- Offer health insurance as an option to all full-time employees working 30 or more hours per week, otherwise the employer will pay penalties.
- Provide Minimum Essential Coverage (MEC) that meets a minimum value threshold.
- Provide coverage that is “affordable” to employees.
*In some instances, employers who have a mix 50 or more full and part time employee’s may not be condsidered an ALE. Visit this link to determine if your business is considered and ALE, even if you have more than 50 employee’s.
Minimum Pay Rate Requirement
Minimum Pay Rate requirements have forced staffing firms and W-2 Employer of Record services that are ALEs to make a tough choice. They must either take the penalties for not offering affordable MEC to all full-time employees, or if they are fortunate enough to have access to group coverage, they must implement a minimum pay rate to make sure coverage meets the affordability requirement.
As a W-2 Employer of Record that primarily employs contractors in the higher-level professional and healthcare sectors, New Source Recruiting’s back office solutions offers W-2 contractors a comprehensive benefits package that includes medical coverage. However, due to the ACA requirements, a $16 per hour minimum pay rate is required. Going by the 9.56% threshold, this pay rate allows the base medical plan offered to be “affordable” for all full-time employees and ensures that plans offered remain ACA compliant.
ACA Reporting: The Final Steps of Compliance
It’s becoming clear that the ACA is an extra burden on all employers. For instance, this is the first year that ALEs subject to section 4980H of the Internal Revenue Code (“Code”) have to file form 1094C and distribute forms 1095C to all of their employees. Fortunately, New Source Recruiting takes that burden away by providing simple and affordable solutions to employers. Employers can focus on training and developing their new employees along with their day to day business, without the extra burden of seeking and providing affordable healthcare options for employess. New Source Recruiting has you covered! Call us today at 1-603-731-6708 Monday through Friday between 8:am and 5:pm. We look forward to your call!