There have been countless articles on healthcare reform and how it impacts your staffing agency. Reading through each of these posts can leave the waters a bit murkier in terms of exactly what the impact is going to be.
What we do know is that healthcare reform isn’t going anywhere with the reelection of President Obama. Starting in January 2014, employers will have to offer qualified health insurance to full-time employees or pay penalties, estimated at $2K per employee. Staffing agencies currently are not fully exempt from these penalties.
This healthcare legislation has resulted in significant discussion regarding the potential negative impact to staffing agencies, even as the ASA has successfully fought for a ‘look back’ period, which lessens penalties.
While much of the discussion regarding potentially negative side effects is valid, there are some definitive benefits that are arising for the staffing industry. 5 such benefits appear below.
5 Crystallizing Benefits
1. Temporary hiring boom likely to continue: many temporary segments are forecasted to peak in 2013. Right or wrong, temporary non-full time employees look more attractive to employers since they may not be on the hook for as high of potential health costs (operative phrase at this point being ‘may not’.) While there is no definitive way to say whether this will truly result in lower health costs – the perception that it will lead many employers to be more comfortable with hiring contingent workers.
2. Healthcare staffing poised to improve: it’s not inherently apparent the specific positions health care reform will create. However, with an estimated 3 percent increase in provided healthcare, there is no denying that the demand for workers within the industry will increase. The increase in demand is a welcome sign for staffing agencies servicing the healthcare industry.
3. Easier to attract and retain better candidates: staffing agencies that offer healthcare coverage to employees “maintain a competitive edge in the marketplace as it pertains to recruiting and retaining employees.” As demand increases and qualified employees become scarce, offering insurance could be the catalyst staffing firms need to thrive in a new era of healthcare.
4. Time to decide: The most impact from the Affordable Care Act will be felt starting January 1st, 2014, which affords staffing agencies a little over a year to decide which road to take. Having time to decide on the correct course of action provides staffing firms the ability to research additional information about the law and weigh their options.
5. Staffing firms control the message to their clients: staffing firms that decide to offer health insurance to their employees and clearly communicate that fact to their clients may see an advantage over competitors that seem to be passing costs on to clients.
While healthcare reform is met with mixed emotions, significant opportunities exist for staffing agencies – both in managing any potential negative impact and better understanding the positive impact. Now is the time for staffing firms to fully immerse themselves into this new world, decide on a strategy, and execute.
For more on how health reform will impact your staffing agency, I invite you to attend the upcoming webinar, Health Care Reform: What You Need to Know, being hosted by Bond US on Thursday, December 13th.