Staffing firms urge Congress to tweak or repeal healthcare law's employer mandate

Staffing firms urged Congress Thursday to repeal the healthcare law's requirement that employers provide insurance for their workers — even as they continue working with federal regulators to tweak the law.

"We are concerned that the Act may not afford sufficient regulatory leeway to provide adequate relief," Ed Lenz, senior vice president at the American Staffing Association, testified at a House Oversight panel hearing on healthcare. "Therefore, we urge Congress to repeal those penalties."

The industry says it would be devastated by the mandate.

"Healthcare reform will force us to change the strategic direction of our company and eliminate [our staffing business] because the risk does not justify the return," Find Great People Intl. President and CEO John Uprichard testified.

Staffing firms have small numbers of permanent workers but large numbers of part-timers who come and go; these would be counted as full-time under the law. The law requires firms with 50 or more full-time workers to offer coverage or pay a penalty of $2,000 per employee per year; the law counts as full-time workers those who are employed on average at least 30 hours of service per week, with respect to any month.

Staffing firms have been working with regulators to tweak several provisions of the law. They want to be able to continue to offer low-cost mini-med plans that don't meet the law's standards, for example, and want the health insurance exchanges to be opened up to businesses with more than 100 employees.

They've made the most progress so far working with the Treasury Department to change the definition of permanent employees for purposes of the mandate. Treasury officials have acknowledged that monthly determinations of what constitutes a full-time employee could cause "uncertainty and inability to predictably identify which employees are considered full-time and, consequently, inability to forecast or avoid [employer mandate] liability." 

Treasury has proposed creating a "look-back" period that would allow employers to choose a measurement period of between three and 12 consecutive months in which employees working full-time (130 hours per month) during the period would be treated as full-time during a subsequent six-month "stability period." 

Still, staffing firms would prefer the mandate be repealed.

Senate Democrats and President Obama have no intention of repealing the mandate. The Congressional Budget Office has estimated that between 500,000 and 1 million would gain coverage by 2019 thanks to the mandate, and repealing it would add billions of dollars to the deficit.

"Employer responsibility is an essential piece of the puzzle" of getting everyone covered, testified Christopher Spiro of the liberal Center for American Progress Action Fund. "It provides an incentive for employers that currently offer coverage to maintain that coverage, the primary source of coverage for millions of Americans. Otherwise, many employers might drop coverage and allow taxpayers to pick up the tab, which would increase the federal deficit by billions of dollars."

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