When it comes to healthcare reform, for many employers the magic number is 50.
Employers with 50 or more full-time workers are classified by the government as a “large employer” and will be required to provide healthcare coverage that meets government standards to employees. However, if you’re an employer near or over that threshold you were granted a reprieve by the U.S. Department of Treasury – complying with the requirement was delayed one year from Jan. 1, 2014 to Jan. 1, 2015.
Regardless of when the law will take effect, the looming regulations are shining the spotlight on independent contractors, and the role they play in businesses and organizations. Because independent contractors do not qualify as employees, some businesses are considering various steps to increase use of their services, or redefine current employee’s status to avoid the requirements of a large employer.
A Wall Street Journal article, A Health Scare for Small Businesses, provides a good overview of the challenges and concerns that are motivating some employers to consider increasing their use of independent contractors or taking other steps to ensure they comply with the requirements.
Yet businesses need to walk a fine line when it comes to how they define and classify employees. Experts and analysts have been weighing in with advice for businesses that could be affected by the new rules. For instance, a June 2013 article posted by the Associated General Contractors of America warned that employers should use “extreme caution” before attempting to manipulate its number of employees by reclassifying them as independent contractors.
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