Bill clarifies Affordable Care Act’s seasonal employment definition
Feb. 18, 2015—The bipartisan Simplifying Technical Aspects Regarding Seasonality (STARS) Act of 2015 (H.R. 863) provides much-needed clarification to the employer mandate’s seasonal worker exemption provision within the Affordable Care Act. By clearly defining seasonal employment, the bill will reduce the administrative burden for small businesses like family farms and ranches and help them avoid hefty penalties, according to Farm Bureau.
The Farm Bureau-supported legislation was introduced last week by Reps. James Renacci (R-Ohio), Kurt Schrader (D-Ore.), Lynn Jenkins (R-Kan.) and Jim Costa (D-Calif.).
Under the ACA, large employers are required to offer health care coverage or pay a fine. Though the law intended to grant an exemption for small, seasonal employers, that intent is lost in multiple inconsistent definitions and burdensome red tape, explained Pat Wolff, American Farm Bureau Federation health insurance specialist.
To determine if one qualifies as an “applicable large employer” that must offer health care coverage, the employer must go through multiple steps to determine if they average 50 or more full-time employees and/or full-time equivalents over the course of the year.
However, if an employer’s workforce exceeds 50 full-time equivalents for not more than four months (120 days), the employer may remove seasonal workers from the equation and recalculate whether they are a large employer. Rules permit the use of a “good faith” interpretation of seasonal worker based on the nature of the work performed.
“Both the calculations for determining if an employer is considered large and the calculation to determine if an employee is full-time are complex and confusing,” said Wolff. “In addition, the definition of a seasonal worker and a seasonal employee are not interchangeable.”
The STARS Act would align the definitions of seasonal worker and seasonal employee as a worker who is employed on a seasonal basis for six months or less during the calendar year. The STARS Act would also simplify the formulas that seasonal employers use to determine if they are Applicable Large Employers and to determine the full-time status of their seasonal employees.
“This targeted approach provides critical relief without fundamentally upsetting the intent of the ACA’s employer provisions,” the American Farm Bureau Federation, several state Farm Bureaus and more than 100 other organizations wrote in a letter of support to the bill’s sponsors.