Western Growers is promoting a small, but important, legislative fix to the Affordable Care Act (ACA) that would help employers determine the healthcare eligibility for their seasonal workers. The legislation, known as the Stars Act (Simplifying Technical Aspects Regarding Seasonality), aims to permanently codify IRS regulations defining who is considered a “seasonal worker” under the law. As it now stands, the only definitions of seasonal workers that exist are contained in IRS regulations. Those regulations can be altered by a future administration.
Considered a technical correction to the law, the Stars Act faces an uphill political battle, but that hasn’t stopped Western Growers from pursuing a fix for members extending back nearly three years. Dennis Nuxoll, vice president for federal government affairs in WGs’ Washington, D.C. office, said Western Growers has been “one of the organizations that has helped to frame and propel the legislation” over the past two Congresses.
As a result of our involvement with a multi-industry coalition, as well as with the Obama administration and congressional offices, legislation has been introduced in both the House and Senate that would put into statute language that defines what a seasonal worker is. Why is that important? According to Nuxoll, “Regulations can change from administration to administration, so it’s important to prevent future changes by making the regulation permanent.” He added, “Codifying the definition provides employers with some level of reliability when applying the language to their own operations.”
Genesis of the Legislation
A coalition of various industry groups, led by Western Growers, was concerned that there was no definition in statute or in regulations that defined seasonal employees and how they are to be treated under the law. Are seasonal workers considered full–time employees? Were they defined by the amount of hours they worked or by the amount of time they worked for an employer? If they were considered full-time employees, then they were entitled health care benefits under the ACA. But the bottom line is no one really knew.
The broad-based coalition that formed was an unusual alignment of industries consisting of a cross section of groups who employed large numbers of seasonal employees. Besides the specialty crop industry, the coalition included members from nurseries, greenhouses, and the recreational and tourism industries.
Originally, WG and the coalition pushed for a definition of seasonal worker to be someone who worked for an employer for seven months. The IRS countered and instituted regulations defining a seasonal worker as someone who worked for an employer for six months plus 1 day. This is the definition that the STARS Act is attempting to codify.
Jonathon Alexander, general counsel at Western Growers Assurance Trust said, “The STARS act will help employers avoid misclassification of their workforce so that they don’t run afoul of the large employer mandate penalty. It prevents future regulatory modification of the definition of seasonal employee; protecting employers from potential increased liability and expenses.“
The Political Rub
Unfortunately, the politics surrounding the ACA is quite volatile and although the STARS Act represents a simple technical fix, both Democrats and Republicans have reservations about passing legislation to address the issue. Republicans, many of whom would like to repeal the ACA entirely, are reticent to move legislation that addresses fixes for fear of legitimatizing a law to which they are philosophically opposed. Democrats, on the other hand, fear that any redress of the legislation points out flaws in the bill, opening it to further attack by Republicans. It remains to be seen how or if the House and or Senate will advance the legislation, but the most likely means will be by attaching it to other legislation that is being moved.
The Stars Act introduced in the House has 58 co-sponsors, several from the California delegation, including: Representatives Jim Costa, Doug LaMalfa, David Valadao and Devin Nunes, as well as Scott Tipton from Colorado and Mark Amodei from New Mexico. The companion bill in the Senate was introduced by Senator Kelly Ayotte (R-NH) and is awaiting further action by the Senate Finance Committee.
For more information, contact Dennis Nuxoll at (202) 296-0191.