Should I Consider a Contract Job after the Affordable Care Act?
We’ve been talking about the Affordable Care Act for years now. How will businesses pay for the extra costs? How will it affect hiring? Will it hurt your family budget?
But, how does the Affordable Care Act affect your job search?
For one thing, it could influence the types of jobs you’ll consider. It’s challenging for job seekers to know whether to consider contract or contract-to-hire jobs. Maybe you were willing to take a contract job in the past, but you’re not so sure now. You may have questions, such as:
- Does it matter if it’s a 3 month contract-to-hire versus 6 month contract-to-hire job?
- What if it’s just contract with no potential of going permanent?
If you find yourself wondering these and other questions, you’re not alone! Our recruiters get asked in nearly every interview how ACA affects job seekers.
So, should you still consider taking a contract job, even in the wake of the new healthcare regulations?
There are tons of perks to working contract. Typically, you get paid a higher hourly rate. You’re often working on a project that, once completed, you don’t have to manage or support. It allows you flexibility to build different skill sets so that you can broaden your career options. Or, if you so choose, you could narrow your focus and become a subject matter expert in your field! But, what about health insurance?
In the past, many contractors would simply opt not to carry health insurance coverage for a while. Maybe they were pretty healthy and figured they could pay out-of-pocket if they got sick. Or, maybe they picked up a supplemental plan to cover them in case of something major, like a car accident or surgery. Unfortunately, you don’t have that kind of flexibility anymore.
Here’s what you need to know about the Affordable Care Act before you accept a contract job offer:
- If you do not maintain health coverage, you may be subject to tax penalties – up to $695 per adult and $347.50 per child in your family in 2016 (with no family max penalty)
- You can get an exemption from the tax penalty if you have a single lapse in coverage of less than 90 days
- Many small companies (including staffing agencies) are NOT required to provide health insurance coverage to contract employees until December 1st of next year
- If you accept a job from a company that doesn’t offer insurance, it is your responsibility to obtain coverage elsewhere (i.e. your spouse’s insurance plan or the healthcare marketplace)
I know. It doesn’t sound great. But, fear not, friend. We have great news for you!
When you work as a contractor for Mosaic Personnel, you qualify for health insurance coverage after a wait period of just 60 days!
On the first day of the month following your 60 day wait period, you’ll have the option of whether to accept our health insurance coverage. What’s even better is that the medical insurance coverage we offer you is the very same insurance plan as our own internal, full-time employees!
But, be careful- not all companies offer insurance coverage yet. The Affordable Care Act doesn’t require us to start offering that coverage for another year. We are ahead of the curve, and our processes will be smooth-sailing by the time the requirements apply fully.
What difference does it make which staffing agency presents your resume to an employer?
If you’re considering a contract job with another staffing company, they may not offer health insurance coverage.
It’s more essential than EVER for you to make sure you have the right employment agency represent you. It could mean the difference between great health insurance at a low premium, or enormous tax penalties! Know the right questions to ask:
- Does the employer, or the staffing firm you’re working with, offer medical insurance coverage?
- Is the insurance plan ACA compliant? If not, you may still be subject to the tax penalty.
- How long is the wait period before you qualify? The ACA only allows a lapse in coverage of 90 days or less.
- How much of the premium does the employer cover, and how much will be deducted from your paycheck each month?
- What is the deductible, the max out-of-pocket, and other plan details?
- Are you eligible for COBRA if transitioned from the staffing agency’s payroll onto the permanent employer’s payroll? This can make the difference between a single lapse in coverage or two, which would result in a penalty.
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