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Avoid Affordable Care Act Financial Penalties

As a follow-up to our blog article two weeks ago regarding an Affordable Care Act (ACA) 2014 to do list, this article focuses on saving your company time and money by avoiding hefty penalties and fees directly related to the ACA.

Under the ACA, insurers are unable to impose annual dollar amount limits on benefits for any individual, and they must provide certain preventive services, like mammograms and colon cancer screenings, without co-payments or other charges.

This particular change in the ACA is meant to strongly deter large companies from giving workers a tax-free stipend to use for health insurance purchase in the exchange. The IRS has stated that doing this in 2015, when the employer mandate will be enforced, will not satisfy the requirements of the ACA, as a result, the company would be fined for failure to comply.

An alternative to paying hefty healthcare charges, or government imposed fees and fines would be to consider using contract staffing to provide employees. Many times contract staffing can offer health insurance and other valuable benefits at a discounted price than providing it directly.

Businesses maintain a small core group of traditional employees, those who are key personnel and have necessary experience, longevity, drive and stability to continue the growth of the company. In addition to this core, contractors are used to help with the day-to-day responsibilities and tasks that are critical to projects.

An example of this workforce marriage would be an accounting firm hiring contractors during tax season, a manufacturing plant hiring engineering contractors during the launch of a new project or plant contractors during an upswing in production.

Contractors can be used for longer term needs to take some pressure off of HR when hiring demands or training demands are high, as well as in floater positions to fill in for various departments as needs arise.

As the Affordable Care Act continues to evolve, so too will the solutions to carrying the hefty financial burdens that are sure to come with it.