5 Industry Trends Staffing Firms Should Be Aware of
With the new year comes new changes and challenges. Here are five industry trends that may impact staffing firms in 2023.
Regulation Changes in 2023 – Several ACA health insurance regulation changes are taking place in 2023, which may affect costs and strategies for offering insurance to temporary employees. The affordability test, which is the maximum amount an employer can charge an employee for health coverage for an individual is decreasing to 9.12%. This increases the amount employers need to contribute toward premiums. Employers will need to plan accordingly.
ACA Exchange Subsides – Newly enhanced ACA exchange subsides will be more attractive to employees who want affordable coverage for themselves and family members. This means more employees will go to the exchange for subsided coverage and can result in more Part B penalties for an employer depending on their health insurance strategy.
IRS Ends Good Faith Relief – The IRS has ended its good faith transitional relief for ACA reporting error penalties. The IRS will no longer allow employers to correct their reports to clear a penalty. Staffing firms need to devote extra attention to ensure these reports are accurate before being submitted.
Struggles Remain, Pain Eases for Unemployment – The economic outlook is uncertain with a possible recession on the horizon. While there have been notable high profile hiring freezes and layoffs, the unemployment rate remains low. Given that staffing firms are still struggling to find candidates for job openings, there is the possibility that the pain may ease.
The economic inflation effects consumer buying power in all areas including the purchasing of insurance. Social inflation also needs to be factored into the equation. Social inflation refers to shifts in societal views that lead to:
Increase litigation
Broader contract interpretation
Plaintiff friendly decisions
Larger jury awards
Costs of claims and insurance
Employee vs. Independent Contractor Role in Staffing – Staffing firms that make independent contractor or 1099 placements need to be aware that the Department of Labor is moving forward with a new rule aimed at further clarifying workers that are employees versus independent contractors. The new rule will likely require more workers to be classified as employees, rather than independent contractors. This significantly increases the costs associated with these workers, including health benefits and workers’ compensation.
Staffing firms should also be aware that this scrutiny regarding misclassification of independent contractors is not only occurring at a federal level – multiple states are also paying heightened attention to classifications.
To learn more on how to prepare for these 2023 staffing industry changes, reach out to your Marsh MMA representative today.
Related Resources:
Related Pages:
ABOUT THE AUTHOR
Kerri Sullivan
Kerri Sullivan is a Senior Vice President and Practice Leader who specializes in the staffing industry. With over 15 years of insurance experience, Kerri has proven expertise by providing in-depth coverage analysis, including the reconstruction of staffing industry products with several insurance carrier partners. Her extensive knowledge of the industry is further augmented through various speaking and teaching opportunities. Kerri earned a Bachelor of Arts degree in Computer Science from the University of California, San Diego. She is a member of several regional staffing associations, as well as the American Staffing Association and TechServe Alliance. Kerri also obtained a number of insurance designations, including Chartered Property Casualty Underwriter (CPCU). In 2017, Kerri was named an Elite Woman in Insurance by Insurance Business America.
