Note this article ran in our May 2014 newsletter. If you haven’t subscribed, simply click here.
Unfortunately the confusion resulting from the troubled roll out of the Affordable Care Act (ACA) generated misunderstandings regarding employer responsibilities to temporary employees. Recently, I spoke with a client who 
thought that their company may have to provide medical coverage to temporary employees. While I knew better, it gave me an opportunity to contact the legal people at the American Staffing Association (ASA) to get a definitive statement.
Here is the email from ASA’s legal people:
Regarding your client’s inquiry as to whether it might have responsibility for providing ACA benefits to your employees, the answer is generally no. The great majority of temporary staffing firms should be considered the common law employer and, in such cases, the client will not be the responsible employer. Moreover, final regulations issued in February make clear that, even in situations where the IRS may view the client as the common law employer (e.g., PEO and similar arrangements such as payrolling) benefits offered by the staffing firm will be viewed as having been offered by the client for purposes of ACA compliance provided certain requirement are met.
We will be publishing a major issue paper on this subject that will be available after our Staffing Law Conference next week. In the meantime, you could share with your client the article we published in February (see link) that refers to an exhaustively detailed BNABloomberg article on the topic. That BNA article was written before the final regulations were issued but remains accurate. It is being updated to reflect the provision mentioned above regarding PEO arrangements.