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.