Affordable Health Care Law – LGS Current Opinion as of 3/15/13

With many changes that will impact our business going into effect in 2014, LGS is paying close attention to all new legislation in preparation for the coming changes. We are working side by side with our industry associations, insurance companies and legal advisors to insure that our business and our customers will be protected and in compliance. There continues to remain a high level of speculation concerning how our industry will adjust to the increase costs and administrative burdens placed upon us by the new law.

We have heard many ideas about how we and other firms should and will proceed with contingent staffing and managing the affordable care act requirements. So far, we have seen no evidence of a viable plan to legally manage employees or pass the burden through to our customers. We suspect the end result will be a combination of several strategies. There will be difficult choices ahead that will require critical decision making regarding how we manage your workforce.

We believe that during next 18 months, the staffing industry will begin to make decisions and move the markets in a standard direction for long term compliance. Unless the current legislation is changed, we anticipate we will need to pass along part of the burden to our clients. This may be done by a pro-rated formula for each worker, at each company, however this could become very problematic due to the constant moving of employees between companies. What seems more likely is that our industry will simply find a generally excepted average rate per hour that will be added to current bill rates. Since not all workers will qualify as full time and we only need to cover the burden on the percentage of employees that do qualify as full time, the rate increase should be a blended number based on each firms percentage of qualified workers against the true cost per qualified worker.

One additional problem that we face is that there is not yet a major medical plan available for staffing employees. This makes compliance difficult unless we opt to pay the fine and direct the employees toward the state exchanges.

Our goal is to be transparent with our clients and ask for their input and preference whenever possible. As we learn more, we will share that information with you. Should you have any immediate questions, please contact Matt Ricksgers at 770-234-0880 Ext 7021.

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