In early 2014, we asked contingent workforce managers at 93 large North American buyers of staffing services how much they expected their temporary worker bill rates to increase as a result of the US Affordable Care Act (ACA). The median response was $1.00 per hour. Thirty-six percent indicated they expected no increase at all. This percentage was down significantly from 2012, when 62% of contingent workforce managers surveyed expected to see no rise in bill rates. Clearly, the potential costs associated with ACA have moved onto the radar of many buyers of staffing services, though the anticipated impact appears to be diminished for buyers of professional staffing.
Now that the US employer mandate to offer health insurance (for organizations with more than 100 full-time equivalent employees) has taken effect, staffing firms and buyers of staffing services alike are assessing the effects. If you haven’t communicated with your staffing suppliers about how costs will be shared (if at all), adding clarity to the arrangement may be a valuable exercise. In addition, we at Staffing Industry Analysts are investigating the impact of ACA on buyers (as well as other contingent workforce management trends) in our 2015 Contingent Manager Survey — open to all contingent workforce managers globally.
Filling out this 15-minute survey will enable us to report back (in a future article) on ACA-related bill rate increases now that the mandate is underway; in addition, completing the full survey will give you immediate access (at the end of the survey) to our recent report, “US Affordable Care Act Requirements: What Contingent Workforce Programs Should Know.”
The 2015 Contingent Manager Survey findings may reveal a different story than what was expected in early 2014 regarding ACA. The bill-rate changes that have taken shape were most likely heavily influenced by the health insurance coverage decisions made by staffing suppliers. When asked in the summer of 2014, most staffing firms surveyed (55%) reported they would offer full major medical insurance to all their temporary workers, meaning the level of benefits would be fully compliant with ACA regulations and thus avoid penalties. Another 15% indicated they would “cost minimize” — either by not offering coverage or offering limited benefit plans and paying the appropriate penalties. However, these figures may have changed since then due to a number of factors. For example, in November 2014, regulators moved against certain “minimum value” plans that excluded inpatient hospitalization or physician services, though the regulators still permitted these plans without penalty under certain conditions for 2015 only. This may have impacted staffing firm coverage decisions. In addition, the outcome of negotiations are especially difficult to predict, particularly in a complicated price negotiation such as temporary worker fees. Furthermore, the range of health insurance plans offered to staffing firms may have evolved since last year. Thus, the jury is still out on where the world of contingent work will land with regard to ACA. With the Contingent Manager Survey now live, we hope to shed some additional light as trends unfold.