Some staffing firm clients are asking staffing firms to charge a higher fee for employees enrolled in the staffing firm’s health insurance plan than for those who are not enrolled—and are asking the staffing firm to identify the enrolled employees by name. Staffing industry legal experts believe that disclosing employee names is not only unnecessary, it also could run afoul of the rules governing medical privacy under the Health Insurance Portability and Accountability Act of 1996 (HIPAA).

Examining the Special Rule
Governing Offers of Coverage

The request to charge a higher fee is
based on a provision in the final regu-
lations implementing the Affordable
Care Act’s employer shared responsibil-
ity rules that apply in cases where the
client, not staffing firm, is the common
law employer. Under a special rule
found in Treas. Reg. §54.4980H- 4(d)( 2)—
which governs offers of coverage on behalf
of unrelated employers—if the staffing firm
charges a higher fee with respect to tempo-
rary and contract employees who enroll in
the staffing firm’s group health insurance
plan, the coverage offered by the staffing
firm will be viewed as provided by the client,
thus satisfying the client’s ACA employer
obligation. Importantly, nowhere does the
special rule require the staffing firm to iden-
tify the enrolled employees by name.