Statement Issued from U.S. treasury Department: Treasury Ensures Fair Treatment for Volunteer Firefighters and Emergency Responders Under the Affordable Care Act
The Affordable Care Act requires that an employer with 50 or more full-time employees offer affordable and adequate health care coverage to its employees. For this purpose, full time means 30 hours or more per week on average, with the hours of employees working less than that aggregated into full-time equivalents. Employers that do not fulfill this obligation may be required to make a payment in lieu of meeting their responsibilities, which are described in what are called the employer shared responsibility provisions. An important question arises about how the hours of volunteer firefighters and other volunteer emergency responders should be taken into account in determining whether they are full-time employees and for counting toward the 50-employee threshold. Treasury is acting to ensure that emergency volunteer service is accorded appropriate treatment under the Affordable Care Act.
Treasury and the IRS issued proposed regulations on the employer shared responsibility provisions (Section 4980H of the Tax Code) in December 2012 and invited public comments. Numerous comments were received from individuals and local fire and Emergency Medical Service departments that rely on volunteers. The comments generally suggested that the employer responsibility rules should not count volunteer hours of nominally compensated volunteer firefighters and emergency medical personnel in determining full-time employees (or full-time equivalents). In addition, Treasury heard from numerous members of Congress who expressed these same concerns on behalf of the volunteer emergency responders in their states and districts.
Treasury and the IRS carefully reviewed these comments and spoke with representatives of volunteer firefighters and volunteer emergency personnel to gain a better understanding of their specific situations. Treasury and the IRS also reviewed various rules that apply to such volunteer personnel under other laws. These include the statutory provisions that apply to bona fide volunteers under Section 457(e)(11) of the Tax Code (relating to deferred compensation plans of state and local governments and tax-exempt organizations) and rules governing the treatment of volunteers for purposes of the Federal wage and hour laws. As a result of that review and analysis, the forthcoming final regulations relating to employer shared responsibility generally will not require volunteer hours of bona fide volunteer firefighters and volunteer emergency medical personnel at governmental or tax-exempt organizations to be counted when determining full-time employees (or full-time equivalents).
These final regulations, which we expect to issue shortly, are intended to provide timely guidance for the volunteer emergency responder community. We think this guidance strikes the appropriate balance in the treatment provided to traditional full-time emergency responder employees, bona fide volunteers, and to our Nation's first responder units, many of which heavily rely on volunteers.
Mark J. Mazur is the Assitant Secretary for Tax Policy at the United States Department of the Treasury.
NATIONAL FIRE SERVICE ORGANIZATIONS ADDRESS VOLUNTEER FIRE SERVICE CONCERNS WITH THE PATIENT PROTECTION AND AFFORDABLE CARE ACT
The Congressional Fire Services Institute (CFSI), the National Volunteer Fire Council (NVFC) and the International Association of Fire Chiefs (IAFC), are currently working with members of Congress and the Administration to address the potential impact that the Patient Protection and Affordable Care Act (PPACA) could have on volunteer fire departments throughout the nation.
According to the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148), employers with more than 50 full-time employees (or their equivalents (FTE)) must provide health insurance to employees that work more than 30 hours per week. Unfortunately, the Internal Revenue Service has ruled that volunteer firefighters that receive nominal benefits from their fire departments (including stipends, end-of-the-year banquets and awards) count as "employees" of fire departments. An unintended consequence of this IRS ruling is that fire departments may have to provide health insurance to volunteers that serve more than 30 hours per week at their local fire department.
The effect of this provision could cause serious financial hardship to fire departments. Many volunteer fire departments rely upon local donations and fundraisers to fund their basic operations. The addition of a requirement to provide health insurance would present a serious financial challenge to them.
Although the final regulations have not been codified, the aforementioned organizations are working with a bipartisan group of members of Congress to address this potential consequence of the PPACA.
The NVFC, IAFC, and several members of Congress have sent letters to the IRS asking Acting-Commissioner Werfel to release regulations or guidance stating volunteers who receive nominal compensation will not be considered employees under PPACA. On December 10, 2013, Senator Mark Warner (VA) and Congressman Lou Barletta (PA-11) introduced the Protecting Volunteer Firefighters and Emergency Responders Act (H.R. 3685 and S. 1798). The legislation ensures that volunteers are not counted as full-time employees under the shared responsibility requirements contained in PPACA.
CFSI, NVFC and IAFC will continue to provide updates to the fire service as these efforts are being addressed on Capitol Hill and within the Administration. Please visit our website sites (www.cfsi.org, www.nvfc.org, www.iafc.org) for the latest information.
Bill Webb (CFSI)
Dave Finger (NVFC)
(202) 887-5700 ext. 112
Congress passed the Patient Protection and Affordable Care Act (PPACA or ACA)—one of the most significant reforms to the U.S. health care system in over a generation in 2010. Since its passage, the federal government and others have been analyzing the act and determining how to implement this legislation. As a result, we’re only just beginning to understand how the act will impact the fire and emergency service.
The legislation is extensive, with many moving pieces, and the public opinion of the bill is highly polarized. Therefore, it’s critical that fire department leaders fully understand the facts and avoid sharing misinformation. Learn more by downloading this Fact Sheet from the International Association of Fire Chiefs: http://www.iafc.org/files/1GR/gr_PPACAfactSheet.pdf
Also, be sure to tell the IRS to exempt Volunteer Firefighters and EMS personnel from the Affordable Care Act's Shared Responsibility Provision. Simply download the IAFC's Draft Letter (http://bit.ly/1fFMf2V), input your department's information, and submit it to the IRS here (http://1.usa.gov/19UjgpC). Act quickly as this comment opportunity will expire on November 8.
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