Much has come up recently about the effect the Patient Protection and Affordable Care Act (PPACA) will have on volunteer fire companies.
The first thing to note is that it will affect only those fire companies with more than 50 volunteers. Fortunately, most of our area companies have less than 50 volunteers. Unfortunately, those companies wished they had 50 or more qualified volunteers to man the trucks during an emergency.
According to the National Fire Department Census, more than 97 percent of Pennsylvania fire departments are staffed by volunteers. Truth is that the number of qualified volunteer firefighter has been dwindling in Pennsylvania for the last decade. But that’s another story for another day.
The current problem with the volunteers and the PPACA is that the Internal Revenue Service (IRS) has determined that, for tax purposes, volunteer firefighters are employees of the agency they serve and therefore those agencies may have to provide health insurance for them or face a tax penalty. To the contrary, the Department of Labor classified most volunteers as non-employees. In the end, it’s the IRS who is responsible for enforcing the shared responsibility provision of the PPACA so that is where the clarification needs to come from.
The mandate for requiring businesses with more than 50 employees to provide health insurance coverage has already been delayed until 2015 for other reasons, but it should give officials time to vet the issue and, hopefully, change the IRS definition or exempt volunteer fire companies. Failure to do so will drastically add to the costs of maintaining the fire companies.
There is also the question of what constitutes “hours worked.” A volunteer can be in training sessions for more than 30 hours in a week or can easily hit 30 hours of service during one storm. In fact, a volunteer is available for service whenever they are carrying their personal emergency alert device – be it a pager or a cell phone.
Also unclear is the question of mutual aid paid by municipalities to more than one fire company that provides services to that community. Will those fire companies be lumped together by the IRS definition and all of the volunteers counted towards that 50-employee limit? If so, that will become a problem for several local companies.
Many groups, including the International Association of Fire Chiefs (IAFC) and National Volunteer Fire Council, have already filed requests for clarification of the IRS rule. Most volunteer firefighters have full-time jobs that already provide health insurance.
Rep. Lou Barletta (R-Pa.), who also submitted a request for clarification doesn’t think that officials intended to include volunteer firefighters among employees who should be given health insurance but it is not clear how they would be treated under the PPACA.
If the final IRS ruling classifies volunteer firefighters as employees, some fire companies may be forced to cut back on services or close – something nobody wants to see.
The IAFC has offered suggested solutions, one being to exclude volunteer firefighters from the shared responsibility provision.
Right now, the question regarding the volunteer fire companies is just one of many issues the IRS must address before the mandate goes into effect.
It should be an easy fix for the IRS and the tax agency shouldn’t wait till the end of 2014 to issue a ruling. All that does is give the issue time to become somebody’s political bargaining chip.