Seeking Solutions for Obamacare

A reader writes…

Hi, Anita:

As the HR Director of a company with 56 people, Obamacare is on the top of my mind. My company is on the fence about what we should do. We don’t want to let go 7 people to be under the magic number of 50, but we want to avoid the steep penalties. What are your thoughts on how to best handle this new law as an employer or business owner?

Dear, Seeking a Solution:

Thank you for the question! Business owners and employers are all struggling with the looming question of how they will handle the coming implementation of Obamacare’s penalty provisions. I am glad to hear that my readers are already thinking about the subject and beginning to get their strategies in order now. In your situation Doctor_Handswith just over 50 employees, you are in the category that must provide affordable health insurance or face hefty fines.

After doing some research and evaluating the options, I have determined that the best course of action for businesses like yours is to move your excess employees over to a staffing firm’s payroll. Here is how I came to this conclusion.

  • By migrating 7 workers to a staffing firm’s payroll, you can cut your “full-time equivalent” staff below the 50-person limit, which means your company will not be subject to fees and penalties. The staffing company becomes the official employer of record and is responsible for providing health care or absorbing the penalty. In our reader’s case, if they were to move Medical_Filesthe 7 people from their payroll to a staffing company, it could save them $14,000 in penalties and potentially even more in insurance costs.
  • Some staffing firms offer health benefits to their temporary employees, relieving you of any moral concern or burden. My favorites are Select Staffing, RemX Specialty Staffing, Remedy Intelligent Staffing, and Westaff.
  • Lower insurance rates for your employees.  Larger staffing firms have so many employees on their insurance plans that they are able to negotiate great group rates. This cost savings can be passed on to you.
  • By moving your a portion of your workforce to a staffing firm, you will not be required to comply with the complex reporting requirements. The employer must report regularly to the IRS, its employees, and to all states in which the company does business. This will reduce costs and provide a savings in administrative overhead.

On a recent episode of his CNBC show Mad Money, financial analyst Jim Cramer noted that the demand for temps is mushrooming, “fueled in part by the pending implementation of Obamacare.” He says: “Businesses of all sizes are searching for ways to cope with this law, and the easiest way to avoid paying these expenses is to hire more temps.”

Employers, what are your plans for managing the Obamacare mandate? Will you be turning to staffing firms for help?

Best wishes,

Anita

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Disclaimer

Anita Clew's blog posts are intended for general guidance and should never be taken as legal advice. In all instances where harassment, inequity, or unfair treatment is believed to be present, please consult your HR Department or legal representation.
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