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The Affordable Care Act & Invoice Factoring

If you listen to any water cooler chat among small businesses and the organizations that support them, it won’t be long before you’ll hear worrisome discussion regarding the Affordable Care Act (ACA). This new government mandate, which in general terms, will require businesses with 50 or more employees to provide health insurance coverage to their staff.

ACA to Influence Invoice Factoring Companies & Factoring Accounts Receivables

Factoring Healthcare & StaffingSome small businesses including invoice factoring companies and sectors that they serve such as staffing factoring, medical receivables factoring and temp agency factoring have expressed concern over the new law about how it may be difficult and costly to implement. These companies’ concerns have merit as demonstrated by the government’s suspension of the law one more year from 2014 to 2015 giving small to medium sized companies more time to understand and comply with the law.

All businesses including factoring receivables companies with 50 full-time employees or more who fail to provide affordable and adequate health care coverage will be then have to pay a fine of $2,000 per employee (minus the first 30 employees). Factoring companies and all businesses that do not provide adequate and affordable coverage, defined by the law as 9.5% of an employee’s taxable income, will also be hit with fees.

Medical Staffing Factoring Likely Will See Big Effect from ACA

Though it remains to be seen whether the ACA will be a boon or bane for business – like most any new law it will probably be a little bit of both – many are speculating the law will significantly impact medical factoring companies (those involved in factoring medical receivables) as well as staffing financing and staff agency factoring, and temp agency factoring. These types of businesses that deal with independent contractors and temporary staff may not be accustomed to providing health insurance but under the new law, will be required to do so. The law gets somewhat complicated regarding the coverage of seasonal employees, part-time employees, and independent contractors. Nonetheless, all small businesses, including temp agencies and staffing factoring companies will need to either comply with the law or pay penalties and fees for failing to comply.

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About the Author:

Robert Bernfeld started in the commercial finance industry in 1974. His early years included positions with Aetna Business Credit and Foothill Group. During the next thirty five years. Mr. Bernfeld established both equipment leasing and accounts receivable factoring companies. He partnered in founding Business Facilitators, Inc. in 1999. Mr Bernfeld graduated from the University of California, Riverside in 1974 and received his Juris Doctorate from Loyola University School of Law in 1977.

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