ASC Owners & Operators: 5 Things to Know About Managing Employer Health Benefits If You Rely On Flexible Staff Scheduling

Tom JacobsAmbulatory surgery centers classified as applicable large employers will face new challenges with respect to offering health insurance coverage to full time employees.

This will impact many ASCs, and change the way they manage flexible scheduling and low census days.

Here are things ASC owners and operators must to know about the upcoming changes and how to prepare for the future.

1. How the 50 employees are added up — they include FTEs. Under the current implementation timeline for healthcare reform, companies with 50 or more full time or full time equivalent employees are required to offer health benefits by Jan. 1, 2015 or pay a penalty.

To determine whether your ASC is at this threshold, you count the employees that average 30 hours per week as full-time employees and then count all of the hours of all other employees during a month and divide that total by 120 hours, which is then the number of full-time equivalent employees. This could have an impact on ASCs that currently employ 35 to 40 full time employees because their part time and per diem staff could increase to 50 FTE.

"Among ASCs, our experience is that if you have 35 to 40 employees who work 30 hours per week, and you rely heavily on part time and per diem staff, you might need to start tracking employee hours," says Tom Jacobs, CEO and co-founder of MedHQ. "You have to figure out whether you need to offer coverage to those variable hourly rate employees that are on the margin between working on the full time schedule and not full time schedule."

For insurance, for insurance coverage purposes, a "full-time employee" is classified as someone who works 30 hours or more per week regularly. You might need to take action monthly on enrollment of your existing staff in your health plan. Employees may slip into or out of eligibility, and additional federal taxes (penalties) will be owed if an eligible employee receives their insurance with a subsidy through an exchange.

"If people are working 20 to 30 hours per week off and on, problems arise when the insurance company considers them full time but the ASC does not," says John Merski Jr., executive director of HR for MedHQ. "I think because of these rules being enforced there will be more people who are uninsured because the economy is poor and ASCs will go to low census so there are fewer full time staff members."

2. Flexing employees. Many ambulatory surgery centers currently "flex" nurses and other employees depending on the daily or weekly workload. Employees may work full time hours one week and not the next; this practice could raise issues for ASCs.

"For example," says Mr. Jacobs, "if an ASC hires someone as a full time nurse but then experiences a slow period — perhaps a senior surgeon retires and it will take 18 months to bring volume back up to previous rates — so the nurse's schedule might dip below 30 hours per week for a six- or 12-month period. The employee could become ineligible for insurance benefits during that time."

"In the past, this wasn't as rigorously regulated," says Mr. Jacobs. "The employer and employee have always been subject to audit by the health insurance carrier, but with this new regime, you can imagine there is a lot more scrutiny over whether employees are working full time and direct actions could be taken under these circumstances."

If the surgery center wants to keep a nurse at full-time level and the operating schedule is slow, the nurse will likely take on additional non-clinical responsibilities instead of being sent home. "If the centers don't want to be penalized for flexing the nurses, which is normal for surgery centers, they may ask the nurses to stock materials or work on other projects that aren't typical of being a nurse in the traditional sense," says Mr. Merski.

3. ASCs will be penalized if non-full time employees receive benefits. Many surgery centers attract the best talent by offering competitive benefits packages, but employees must always work full time in order to receive them.

"The ASC nurse manager might have extra nurses on who are part time with benefits," says Mr. Merski. "That's going away. If centers try to sneak non-full time employees in for coverage and get caught, they'll be penalized. They have to work 30 hours per week regularly. A lot of ASCs have clinical staff working four 10-hour days or four eight-hour days and then close on Friday. All you have to do is have one day short and then the employee is in a situation where they only worked 28 hours that week. This is going to be a problem."

Part time employees will now need coverage from the health insurance exchanges.

4. Artificial part time staff wage inflation. ASCs will inflate wages to part time employees to attract nurses that will need to purchase their own insurance on the exchanges. Centers may offer $50 to $60 per hour for part time nurses, which will cause conflict between them and the full time nurses who are paid less per hour but receive benefits.

"The insider nurses already know the outsider nurses get paid more because they don't have health benefits," says Mr. Merski. "But the plans on the exchanges have higher premiums."

5. Hiring new employees. Hiring a new hourly worker who is less than full time will become complex. You don't know for sure how many hours the new employee will work until the end of the month. "There are a few rules regarding safe harbor in those situations that most employers will end up using," says Mr. Jacobs.

Nurse managers will be more responsible for scheduling people to ensure they don't flip between full time and part time hours. Those that are working more than 30 hours per week regularly will be scheduled more while those who work somewhere in between will be scheduled less.

"There will be a higher number of part-time employees, but it will be harder to attract them," says Mr. Jacobs. "It's a new problem and insurance companies are going to be watching because they want to see whether the employer is conforming to the rules. If people are counted as full time employees but they are not working full time hours, then they are not eligible for benefits."

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