The effects of Employment Practices Liability Insurance (EPLI) on the Affordable Care Act (ACA) and by extension, Workers’ Compensation Insurance (WC) has not yet been fully understood.
Employers are sued for unfair labor practices such as wrongful termination, unfair pay, discriminatory hiring practices, and now, cutting employee hours below thirty per week to avoid inclusion under the ACA.
Under the Employees Retirement Income Security Act(ERISA), employers cannot interfere with employees benefits. As employers reduce an employee’s working hours to disqualify them from company paid ACA benefits, some courts are considering whether this constitutes interference.
The ACA, given its universal nature, brings into question the no-fault medical aspects of workers’ compensation, particularly for independent contractors. Can a company safely assume their independent contractors have full medical benefits as a result of ACA? The ACA does not mention a coordination of work related medical costs with workers’ compensation.
These facts combined lead to more part-time workers and independent contractor status. Both employment conditions move the employee to a home office or remote location, further shifting traditional company overhead costs to employees.
Premium for part time employees is charged as payroll multiplied by the rate. In competitive states, insurance companies give fewer discounted rates to companies with a high percentage of part time employees. If an employee only works twenty hours per week, adequate safety training takes twice the percentage of time compared to a traditional work week. Safety becomes expensive.
Independent contractor status solves the thirty hour threshold issue, but complicates the workers’ compensation issue. Technically, the independent contractor should provide a certificate of insurance to the employer. If the ACA does not coordinate benefits for job related injuries, the independent contractor pays for the same benefits twice.
If the company provides the workers compensation, their carrier will certainly raise the rates for covering uncontrollable workers.
These issues will be worked out over time. Until then, keep the EPLI in force with higher limits.
