Bipartisan legislation was reintroduced in early October to make changes to the Affordable Care Act (ACA, also known as Obamacare) so that it would be easier for large seasonal employers to comply with ACA requirement to offer health insurance to full-time employees.
The bill is H.R. 3956, Simplifying Technical Aspects Regarding Seasonality Act of 2017, or the STARS Act.
Michigan Farm Bureau supports the legislation
“MFB is glad to see the STARS act has been reintroduced this year,” said John Kran, national lobbyist with Michigan Farm Bureau. “The ACA created confusion with regard to which employers are required to provide health insurance for seasonal labor, and Michigan farmers have been asking for clarity for several years. This bill would clarify the definition of a seasonal worker,” he said.
“Many of our members in Michigan employ more than 50 workers for a relatively short period of time for planting or harvest, and this bill would clarify which employers are required to provide healthcare and simplifies the administration of the ACA for small seasonal employers,” he said. “Having clarity and certainty of knowing an employer’s responsibilities is something that is important to Michigan farmers who employ seasonal labor.”
The STARS Act would align the definitions of seasonal worker and seasonal employee as a worker who is employed on a seasonal basis for six months or less during the calendar year. The STARS Act would also simplify the formulas that seasonal employers use to determine if they are Applicable Large Employers and to determine the full-time status of their seasonal employees.
The ACA requires Applicable Large Employers to offer their full-time employees qualified health insurance coverage.
An Applicable Large Employer is one that employs 50 or more full-time equivalents averaged monthly over a calendar year. The ACA created a seasonal worker exception. A large employer whose workforce exceeds 50 full-time equivalents for no more than 120 days may remove seasonal workers from the original calculation and recalculate the size of their workforce.
A full-time employee is a person who averages 30 or more hours per week. Regulations define a seasonal employee as one hired for a position for which customary annual employment is six months or less. A look-back measurement period can be used to determine the full-time status of seasonal employees.
Both the calculations for determining if an employer is considered large and the calculation to determine if an employee is full-time are complex and confusing. Also, the definition of a seasonal worker and a seasonal employee are not interchangeable. The result has been confusing, and often incorrect, compliance information that unnecessarily puts small seasonal employers at risk for potential tax liabilities.
The STARS Act would align the definitions of seasonal worker and seasonal employee as a worker who is employed on a seasonal basis for six months or less during the calendar year.