Preparing for Impact: The Effects of the Affordable Care Act on Contingent Workforce Management

It is one of the hottest topics in contingent workforce management (CWM) this year, and for good reason. As rumors swirl and the talking heads make predictions, we must try to figure out how the ACA will affect the non-employee workforce. Sometimes, it is tough to separate fact from fiction.

Everyone is talking about it. The Affordable Care Act (ACA). For that reason, on October 1, 2014, Beeline sponsored a thought leadership webinar hosted by Staffing Industry Analysts (SIA) titled, “The Effects of the ACA on Contingent Workforce Management.” Bryan Peña, SIA’s Vice President of Contingent Workforce Strategies and Research, hosted five experts to help HR and procurement professionals (who manage Contingent Staffing) fully understand how the ACA will affect CWM. Beeline’s own Amy Woodham, Director of Product Management, acted as the session’s moderator. After all, it is important to know the answers to some of the Affordable Care Act questions that have been plaguing us lately, such as:
  • What do staffing buyers need to know?
  • Who is responsible for contingent labor?
  • What will happen to rates?
  • What should I be tracking and how can a VMS help me?
  • How can I avoid the increased risk related to worker misclassification?
It is tough enough being responsible for the staffing and management of your extended workforce. The ACA adds another layer of complexity. That is why SIA gathered leading suppliers of staffing services to share their expertise. This webinar had plenty of in-the-trenches insights to help you as you navigate the healthcare reform journey. Greg Muccio, Senior Manager of the People Department for Southwest Airlines, Brian McCourt, Pontoon’s Vice President of Product Innovation, Alden Bianchi, the Practice Group Leader of Employee Benefits & Executive Compensation for Mintz Levin, and Edward Lenz, Senior Counsel for the American Staffing Association, were the panelists. Here is a glimpse of what was on the agenda:

Who owns the risk?

One question that keeps popping up when engaging with staffing suppliers is, “Who is responsible for contingent workers?” Alden Bianchi said “Who owns the risk?” can easily translate into the question, “Whose employees are the folks, really?” Edward Lenz agreed and advised buyers to “Look to be sure that the staffing agreement is very explicit about what the staffing firm does.” He went on to say, “Look at the checklist of employer responsibilities on the staffing firm side of the ledger. If the staffing firm is paying the wages and benefits, withholds the employment taxes, recruits, screens and hires the employees – the contract should call for the staffing firm to establish employment policies governing the employees’ job performance.” He believes that “The staffing firm should also have and retain the right to control employees’ conduct at the work site, even though it may not necessarily be exercised.”

How do you protect your business from risk and stay compliant?

Because the expert panelists represented both the buyer and the supplier side of the equation, there were also plenty of insights on how to best protect your business while adhering to the Affordable Care Act’s mandates. Brian McCourt suggested that contract language in supplier agreements should address the ACA and indemnification, specifically, as addressing healthcare and insurance concerns while onboarding contingent labor is critical. Of course, the increased visibility offered by a VMS was also a topic of discussion. The consensus was that you want to do everything you can to make sure your suppliers are compliant.

What will happen to rates?

Healthcare coverage for contingent workers is here to stay, but who is going to foot the bill? Much of the uncertainty about the ACA has stemmed from both buyer and supplier concerns about the impact on rates. According to the experts, although there seems to be an increase, preliminary data indicates that rates may actually be well under $1.00/hour per worker. If suppliers raise their rates, you should ask them to “open their books” and be transparent about how they arrived at the new number. Of course, some suppliers of contingent labor have already addressed this issue so their bill rate will not increase.


Greg Muccio made a great point when he said, “It’s here, it’s not going away, so focus more on how you work through it instead of how to get around it.” The bottom line is that there will continue to be challenges as we adjust to the ACA. Here are a few expert insights gleaned during the webinar:
  • Do not make the solution to your problem more complicated than the problem itself.
  • Ask the right questions when engaging with staffing suppliers on the ACA.
  • Explore the many ways a VMS can help you manage your non-employee workforce.
Would you feel confident if you were asked to advise one of your senior leaders on how the ACA will affect the management of your extended workforce? If you’re not so sure, you’re not alone. When polled, the vast majority of webinar attendees said they understand some of the requirements, but need to know more. To learn more, consider viewing the webinar in its entirety.