NVFC Asks that Volunteer Agencies Not be Subject to the Employer Mandate Under the PPACA

September 23, 2013

On September 9, the National Volunteer Fire Council (NVFC) sent a letter to the Acting Commissioner of the Internal Revenue Service (IRS) asking that volunteers be clearly exempted “…from being considered ‘employees’ of the organizations they serve under the Employer Shared Responsibility Provisions of the (Patient Protection and Affordable Care Act or PPACA).” On September 12, the NVFC issued an Action Alert through our Capwiz system asking subscribers to contact their members of Congress, the President, Vice President, and the IRS to let them know that, “…fire and EMS agencies cannot afford to provide health insurance for volunteer personnel and that volunteers do not have an expectation of receiving such benefits from the agencies that they serve.”

The basic problem is that the IRS considers volunteers to be common law employees of the agencies that they serve. PPACA, commonly referred to as “health care reform” or “Obamacare,” requires large employers to provide full-time employees with health insurance coverage. Because the IRS considers volunteers to be employees and it falls to the IRS to enforce the Employer Shared Responsibility Provision of the PPACA, the NVFC believes that many fire departments could end up facing penalties starting in 2015 if they do not offer health insurance benefits to their volunteers.

Not all volunteer departments will be required to provide health insurance as a result of the PPACA. Many departments will not have enough members working enough hours on a consistent basis to be subject to the PPACA penalties. Employers must have 50 or more “full-time or full-time equivalent employees” to be considered “large employers” under the law. “Full-time employees” are individuals who work for 30 hours or more per week on a consistent basis for a particular employer. Employers with 30 or fewer full-time employees will not be penalized for not offering health insurance coverage under the PPACA, even if they qualify as a “large employer.” In August, the NVFC published an article explaining in more detail how all of this is supposed to work based on the language in the law.

Some in Congress have called for the PPACA to be repealed or defunded. Despite repeated attempts in recent years, both houses of Congress have not passed legislation repealing the PPACA and President Obama has indicated that if such legislation were to reach his desk that he would veto it. The NVFC has no position on the PPACA generally and does not view eliminating the law as a viable option for addressing the problem of volunteers being treated as employees under the Employer Shared Responsibility Provision.

The goal of the PPACA is to make it possible for those without access to employer- or government-provided insurance to be able to purchase affordable coverage through insurance exchanges. It is critical that volunteer firefighters and EMS personnel have access to affordable health insurance coverage. Exempting volunteers from being treated as employees under the law will allow them to make use of the exchanges without having to worry that the agency that they serve will be fined as a result.

The impact of the PPACA on the volunteer emergency services community could vary greatly depending on how or whether the final implementing regulations that the IRS issues address the application of the law to volunteers. Fully exempting volunteers (including individuals who receive minor benefits in appreciation for their service) from being considered employees under the law as requested by the NVFC would be the quickest and easiest way to address this. If volunteers are not exempted it will depend on what the final regulations say, how individual agencies choose to interpret them, and how the IRS goes about enforcing them.