A staffing company owner started a forum thread asking how Obamacare would affect his industry.
“We have people that come and work for us for just a week,” he said. “They have to have healthcare? Or do we have to pay 8% on our payroll?”
One of the responses was, “You are so screwed.”
It’s looking that way for all of us, when companies are planning to opt for paying a fine over healthcare coverage.
American Staffing Association President Richard Wahlquist said, “With last year’s health care reform bill a lot of health care insurance and compliance issues were raised.”
With no other choice but to adapt by 2014, the ASA formed a partnership with First Staff Benefits, powered by Enrollment First, Inc.
Seven years ago, Enrollment First created a benefits system custom-made for temporary and contract workers.
“Our focus is ineligible employees,” said President Hazen Mirts.
Tipped staff like waitresses, 1099 contractors and temporary workers are just a few examples of workers who don’t receive benefits.
Mirts told me that Obamacare “outlawed certain types of medical plans” within the staffing industry.
The Department of Health and Human Services tried to play good cop by putting in an annual limit requirement waiver that exempts recipients from the increased amount of yearly healthcare coverage they provide their workers.
The bad news was that it was only a year-by-year program, and staffing companies only have one more year to apply for a waiver.
The government also says HHS never had the authority to enact this waiver.
Mirts said most staffing firms operate under what are called “mini-medical plans.”
Mini-meds are dressed up to look like a normal employee benefit plan when it’s really not.
Mirts gave me an example of a limited benefit: The employee is given a co-pay of $20 for a doctor’s visit, but the limit is $250, so they max out before the year is even over.
Can you imagine having to give your employees letters saying they really don’t have healthcare coverage?
That’s actually what happens, according to Mirts.
It creates animosity when staffers are calling in, saying, “What have we been paying for?”
Enrollment First has had a long-term relationship with the ASA, and having worked with staffing companies already, they had some models that were exactly the same.
“We were already in this segment, just in other areas,” Mirts said.
Last fall they created First Staff Benefits, the program that is “staffing-specific” for employees that don’t qualify for full-time benefits. What First Staff Benefits is offering to staffing companies is health insurance benefits that require no waivers but guarantee their rates until 2014.
“Our product is not governed by HHS,” Mirts said. “[It is] not under their regulation or scrutiny.”
Staffing firms are made up of recruiters, not human resources, yet they need to be knowledgeable in administrative aspects, Mirts said. This only creates more mass confusion.
At First Staff Benefits, the firms will have a separate HR entity that helps with claims, insurance cards, adding dependents and the like.
“We have a salary-based call center that runs 24/7, that becomes an HR department,” Mirts said. “They can do business with us, remove the administration from their plate. They can take this whole package and put it on the shelf.”
Mirts warned me that the rules will change after 2014, because nobody knows what will happen then. He said all laws “are a totally different conversation from today. What we have is a bridge until then.”
This bridge totally hinges on the success of the staffing company, and Enrollment First hopes to help them remove the hassles of insurance while enabling them to enhance their recruiting tools.