News

Smart staffing companies are listening to Essential StaffCARE before making their final ACA decisions.

Three years ago, when MEC plans first arrived on the scene, Essential StaffCARE was the first to recommend offering this plan to ALL employees and job applicants for added protection, not just full-time calculated employees.

We called this our “Safety Net” strategy. In 2013, we described in detail how this strategy would protect staffing companies from potential repercussions stemming from accidental employee misclassification or reclassification, including the gray area associated with the Variable Hour rule and determining Full Time status.

Today, our clients are thanking us for recommending this Safety Net strategy early on. It provides greater protection against retroactively triggering the nuclear “A” Tax ($2,000 tax per full time employee), which has the potential to put some companies out of business.

Other MEC providers were not as forward thinking, which is causing concern among some staffing companies today, now that ACA is shifting from implementation to enforcement. When the IRS starts auditing staffing companies over ACA compliance, many companies will wish they had this important Safety Net.

WHY YOU NEED ALL EMPLOYEES AND JOB APPLICANTS (REGARDLESS OF THEIR INITIAL JOB CLASSIFICATION) TO COMPLETE THE ESC ENROLLMENT FORM AND EITHER ACCEPT OR DECLINE COVERAGE !!!

Issue:

• Staffing Company with 300 full-time employees based on look-back rule.
• Only offers ACA compliant coverage to 285 (95% of 300) temps thought to be full-time
• IRS audit identifies 20 employees who are re-classified as full-time status, due to their hours worked.
• Now there are really 320 full-time employees, not 300.
• MEC plan was offered to 300, not 320, due to re-classification of 20 employees.
• 300/320 = 93% Offer Rate (below 95% threshold)

Result:

• Staffing Company fails to meet the 95% offer threshold, and is treated under ACA rules as if they did not offer any ACA coverage at all.
• This triggers the $2,000 A-Tax under section 4980(h) on all 320 Full Time employees.
• Penalty = $2,000 x 320 = $640,000 tax penalty
• ESC provides the lowest employer cost ACA solution combined with the highest level of compliance certainty

Contact us today for more information. We provide the insight and experience to keep your company ahead of the curve and reduce your risk. Please contact your ESC Representative today at (877) 372–2203 or sales@essentialstaffcare.com.

“I can honestly say that this open enrollment was the smoothest one I have experienced. I give a lot of credit to (ESC) for staying ahead of the process and communicating with us so well.”

• Rachel Stevens, CEBS, SPHR, SHRM-SCP | Director of Benefits & Compensation | Staffmark 

“Our experience with Essential StaffCARE has been excellent. In fact, we haven’t had any issues during enrollment. I appreciate the new Indemnity and MEC form. It’s much better and easier for employees to understand. And, in my opinion, the ESC Support Center is very good.” 

• Stephanie Zander, Benefit Specialist | Nexeo Staffing

Hundreds of staffing companies are quietly celebrating their ACA strategy. Why? The results are in, and Essential StaffCARE saved them money – a lot of money. ESC had a huge impact on their bottom line, and their ability to compete.

Essential StaffCARE is fully insured with:

• No Upfront Fees
• No Annual Fees
• No Employer Deductible
• No Off Shore Captive
• No Stop-Loss Needed
• No mandatory purchase of MEC on all full-time employees

Unlike some overly complicated plans that charge a set-up fee, and pile on administration fees and fine print, then expose staffing companies to the first $25,000 of medical claims on EACH enrolled employee, ESC’s no risk approach consistently produced the Lowest Total Cost!

Some plans even require the staffing firm to purchase a MEC/Wellness Preventative plan on EVERY full-time employee! This is an unnecessary expense!

Example: Staffing firm with 200 Full-time employees – made the ESC Major Medical MV plan affordable to employees. (5 full-time employees enrolled)

Total annual cost to employer:
With ESC Fully Insured – $31,200
With a “Captive Based Partially Self-Funded Plan” – $149,400 min.  to $275,000+
We predicted this would happen. Now we have the numbers to back it up.

This is not just one cherry-picked example. All staffing companies offering ESC’s Fully Insured ACA compliant Major Medical MV plans have similar results.

Our predictions came true. There is more to the picture than just rates.

The ability to consistently predict the results of plan designs, enrollment processes, and plan pricing, comes from decades of experience providing health insurance and employee benefits within the staffing industry.

Our clear understanding of the impact of the Affordable Care Act on the fundamentals of underwriting and pricing of health insurance is reality… not magic.

”Math doesn’t lie or have a political agenda” – ESC

This unmatched experience, combined with our conservative, risk–adverse, results–driven philosophy, guide our plan design, communication and enrollment solutions.

There’s a reason why the largest brokerage and consulting firms in the U.S. look to ESC for ACA solutions for the Staffing Industry
Are you spending too much? Don’t worry, you’re not trapped. ESC has the proven solution.

Contact us now to start saving money:

Call 877.372.2203 or email sales@essentialstaffcare.com to contact your ESC representative.