Under Proposed ACA Regulations Volunteers Could be “Employees”

The Affordable Care Act (ACA) is aimed at getting tens of millions of uninsured Americans into the health insurance marketplace, and there are a number of ways the law goes about doing that.  One major initiative, the “employer mandate,” requires employers with at least 50 full-time employees (including full-time equivalent employees) to offer health insurance to all employees that work at least 30 hours per week and their dependents.  Employees that work at least 30 hours per week are considered to be full-time employees under the ACA.  When the ACA was signed into law back in 2010, many assumed that an “employee” was someone who was being paid for work, not a volunteer. 

But when the Internal Revenue Service (IRS) issued proposed regulations on the employer mandate earlier this year, the agency defined an “employee” in accordance with the IRS’s “common law standard.” This “common law standard” states that an “employee” is any individual that performs services for a person that has the right to control and direct that individual, regardless of whether or not the individual is being paid.  In other words, under the IRS’s proposed employer mandate regulations, volunteers could be considered “employees” of the fire or EMS agency if that agency has the right to direct and control the manner in which volunteers provide services.  Because of the nature of the services that fire and EMS agencies provide, and their traditional chain of command structure, these agencies generally "direct and control" the activities of their volunteer members, especially when they are engaged in firefighting, training, and other essential activities.  Under the very broad definition of "employee" proposed by the IRS, even time spent on call or in the station waiting for a call could potentially be included in the calculation of "hours worked" by volunteers for determining coverage under the employeer mandate.  If these proposed regulations are finalized without a clear provision that volunteers are expressly not to be considered "employees" under the ACA, added burdens will be placed on all fire and EMS agencies (and other non-profit organizations) that rely on volunteers to provide essential community services.  Of course, rural Americal will be the hardest hit.  

So, under the proposed regulations, it is possible that any volunteer at a fire or EMS agency could be considered to be an “employee” under the ACA.  That means that volunteers may have to be included in the calculation for determining whether the employer has the requisite 50 employees in order to be covered by the mandate.  It also means that agencies may have to provide health insurance to any volunteer who works at least 30 hours per week because that volunteer might be considered a full-time employee under the law.  This could pose a huge and perhaps insurmountable burden on volunteer agencies across the United States. 

Agencies such as the International Association of Fire Chiefs (IAFC) and the National Volunteer Fire Council (NVFC) have raised this issue with the IRS, asking the IRS to exempt volunteers from being considered “employees” under the employer mandate.  You can read a letter from the NVFC by clicking HERE.  United States Representative Lou Barletta (R-PA) also sent a letter to the IRS asking Acting Commissioner Werfel to clarify whether volunteer EMS providers and firefighters are considered to be employees under the employer mandate. Receiving no immediate response, Senator Mark Warner (D-VA) and Representative Lou Barletta (R-PA) introduced the Protecting Volunteer Firefighters and Emergency Responders Act (H.R. 3685 and S. 1798) on December 10, 2013. The legislation aims to ensure that emergency services volunteers will not counted as full-time employees under the employer mandate. 

PWW is tracking these bills and the latest developments on this and other ACA-related issues.  The IRS is also set to issue final regulations on the employer mandate, and we will be monitoring the progress of those regulations.  If you want to get the inside track on what’s going on with healthcare reform and what opportunities are available to your agency, register for abc3 this spring and be a step ahead.