Fruit and veggie growers facing Obamacare confusion
Most types of farms in Michigan don’t hire enough workers to qualify.
When farmers don’t like what Washington is doing, such as enacting various forms of subsidies and implementing general farm policies, they can often ignore Washington. For certain types of farmers, however, that won’t work with the Affordable Care Act.
“Our farmers do not like the concept of Obamacare. They don’t agree with it and they don’t want it,” said Ryan Findlay, national legislative counsel at the Michigan Farm Bureau in Lansing.
He added, however, that the MFB is working to make sure all farmers in Michigan understand their legal obligations — if any — under Obamacare, and the deadlines attached.
“A majority of Michigan farmers, under the Affordable Care Act, will not be obligated to provide health insurance to their employees, simply because they have less than 50 employees,” said Findlay.
Most farms producing grains or cattle, hogs, sheep and dairy products generally do not need anywhere near 50 employees, although that may not be true for some of the large poultry/egg producers.
However, farmers growing fruits and vegetables — of which there are a great many in West Michigan — are in a different situation that gets “really complicated, really quick,” according to Findlay, because many hire dozens of workers on a seasonal basis.
“Right now, it’s just the lack of information out there,” that is frustrating Michigan fruit and vegetable growers in regard to Obamacare, he said, noting that “the expert” is Nancy L. Farnam of Varnum Law’s Metro Detroit office. Farnam spoke on the issue at the MFB annual meeting in Grand Rapids in early December.
A conversation with Farnam quickly reveals just how complicated the subject is. She said there are special accounting rules pertaining to seasonal employees, who typically would not be considered full-time employees because they don’t work on any given farm year-round.
“But the rules here are not entirely clear,” she added.
Farnam said her “instinct” suggests that seasonal farm workers will generally be excluded by the special accounting rules. However, she said, “The downside is that the farmers will actually have to keep track of everybody’s hours. It’s going to be a whole new administrative burden (on the farmer) unless the final guidance comes up with something that says that short-term employees are excluded altogether from this — which they haven’t done yet.”
She said what farmers have to go on so far is “proposed” guidance. “Hopefully, early in the year we will have final guidance so employers will know what they are supposed to be doing.”
The requirement for employers with more than 50 full-time equivalent employees (30 hours a week or more) to provide health insurance has, of course, been pushed back a year and won’t take effect until 2015.
“But if you are going to be looking at counting hours — tracking people’s hours, you have to start counting (in 2014),” she noted.
One of the special rules Farnam mentioned is: If a farmer has only seasonal employees for 120 days or less, those aren’t counted as full time. But she said if a farmer has two seasons a year, or one that lasts longer than four months, those seasonal employees will be counted “and may throw an employer over that 50-employee threshold.”
Sometimes farmers arrange to hire migrant workers through a farm labor contractor, or farmers may claim they only hire “independent contractors,” said Farnam. Then the issue becomes, who is really the employer for employee benefit purposes? Who is responsible for providing health insurance for full-time farm laborers?
“I would say there is probably not a really clear answer there, but certainly it is something that needs to be looked at and addressed so a farmer can’t go out and just hire a bunch of people they call independent contractors and say, ‘I’m not subject to the law.’”
“Just pronouncing them ‘contractors’ doesn’t work,” she added.
Perhaps even more perplexing for some farmers are the “controlled group rules” that come into play when an individual owns several existing businesses under one parent company — one controlling entity — but isn’t sure if he or she is now an applicable “large employer” and subject to the health insurance mandate.
According to ZaneBenefits of Park City, Utah, employees of businesses within the same controlled group must be counted all together to determine whether the commonly owned companies are subject to the employer mandate.
“It is fairly common for a farmer to have an ownership interest” in another farm, said Farnam, or to be farming with a family member who also owns an interest in another farm.
“I think that is going to be a big issue for some of these farmers,” she said.
Farnam also pointed out another ACA requirement that may be an unfamiliar experience for farmers. Farmers traditionally have not treated seasonal workers as employees for benefits purposes, but now will be required to give notice to their workers of certain benefits, including their ability to buy insurance through the state marketplaces.
“That notice has to go to all employees, including seasonal. Groups (of farmers) I have spoke with have not traditionally done things like that,” she said.
The notice has to be on paper and hand-delivered, included with the worker’s paycheck, or mailed. Simply posting it on a bulletin board at the farm “is not sufficient,” she noted.
“There is a model on the government website that is in Spanish, actually,” said Farnam.
Findlay said if the farm support bill Congress is expected to pass in January is hopelessly confusing, a farmer can decide not to participate in it. Not so for the Affordable Care Act, which entails penalties for those who try to ignore it.
“That confusion and that inability to step away is really driving farmers bonkers,” said Findlay. “They’re ticked off about it.”