Some things are most definitely best left to the professionals. Here’s how I came to embrace the following three reasons to engage an EOR (employer of record service) to address the challenges presented by the Affordable Care Act (Obamacare) and its impact on an organization’s contract labor force. Warning, it ain’t pretty.
It all started with me thinking I’d save a couple dollars by installing a new light fixture in the dining room during the holiday break. I went to the home improvement center and purchased a great looking hanging lamp at a phenomenal, closeout price. I wasn’t going to let any electrician zap me with a huge markup on a fixture. Then I bought the rest of the supplies I’d need to hang it: ceiling fixture anchors, wire nuts, electrical tape, etc. My wife pleaded with me to call the electrician, but I was resolved to save the money (not to mention the time waiting around the house for the electrician to arrive). Long story short, (no pun intended) after a fried circuit breaker, a quasi-serious electrical shock/burn, a fall from the ladder, and a trip to the ER, I was ready to return the fixture (which they wouldn’t take back as a closeout item) and call the electrician. I had spent more time and money – by far – than I would have had I called the electrician from the outset.
As I sat in the waiting room with my burnt mitt and bruised hip, I remembered a conversation I’d recently had with a friend in HR for a large financial corporation regarding how to deal with the ACA’s impact on her contingent labor pool. From the waiting room, I called her to share my epiphany: DON’T DO IT YOURSELF! Seek out a reputable EOR service provider to do this work for you. Here are the three reasons I shared with her when she asked my why I suddenly found religion in this area.
1) An Employer of Record has a much more detailed understanding of the complexities of the ACA legislation and what it takes to ensure compliance with its regulations. Benefits administration is a core component of the business model for an EOR. It is one of most common reasons why organizations engage EOR services to begin with. Moreover, it is the EOR who would be liable for non-compliance and assumes liability for every worker it hosts. As such, you’d better believe they have been keeping close eyes on the law and have already invested significant efforts into ensuring they remain on the right side of the law. It would be a full time job for anyone within an HR department to achieve the same level of expertise with the ACA and even with a resident ACA expert, penalties for any errors or compliance lapses would still accrue to the organization itself.
2) An EOR is better equipped to act flexibly in the face of ACA changes which still keep coming, seemingly on a weekly basis. The new law is not yet fully implemented. Not only was it phased in, but on-the-fly changes have been de rigueur since the beginning as unintended consequences of different facets of the new rules present themselves. Again, the EOR’s core business demands they stay on top of these changes and the best-in-class providers are doing just that. Or, you could add more resources in your HR department to monitor and react to changes as the occur.
3) EOR providers sustain supplier relations and processes for cost recuperation and can likely maintain with more staffing suppliers than a typical HR department enjoys. For this reason, the EOR provider most likely possesses more strategies for recuperating the costs incurred by ACA compliance. They have seen every possible permutation of ACA cost recovery that has been conceived to date by the brightest minds within every staffing agency and can bring this perspective to bear with regard to your contractor workers. Leverage their exposure to best practices from the trenches of the staffing supplier community.
Don’t end up creating extra expense and grinding up more time than you’d have saved by simply leaving complicated projects like ACA cost recovery to the experts. My electrician and several ER nurses will vouch for the veracity of this advice.