TribLIVE

| Business


 
Larger text Larger text Smaller text Smaller text | Order Photo Reprints

Health-insurance mandate poses potential hitch for volunteer fire companies

Sean Stipp | Tribune-Review
A volunteer firefighter washes a fire truck at the Midway-St. Clair Volunteer Fire Department on September 3, 2013.

On the Grid

From the shale fields to the cooling towers, Trib Total Media covers the energy industry in Western Pennsylvania and beyond. For the latest news and views on gas, coal, electricity and more, check out On the Grid today.

Related Stories

Daily Photo Galleries

Business Photo Galleries

Wednesday, Dec. 11, 2013, 11:18 p.m.
 

President Obama's much-maligned health-care program has sparked a new controversy in volunteer firehouses across the country.

The latest uproar centers on whether these fire companies are required to provide health insurance coverage under the Affordable Care Act for their emergency responders — many of whom work for free or for nominal compensation.

The law mandates that businesses with 50 or more full-time workers must provide health coverage or pay a fine. There is concern that it applies to volunteer fire companies because the Internal Revenue Service has ruled that volunteer firefighters are employees.

“At this point, the way the law's written, it has the potential to create an absolute nightmare” for volunteer fire companies, said Edward Mann, Pennsylvania's fire commissioner and the chief of a volunteer department in Mifflin County.

The IRS is in charge of determining which employers must offer coverage under the Affordable Care Act, but its classification of volunteer firefighters as employees had nothing to do with the law known as Obamacare. Nevertheless, it has raised concerns that the rule may apply.

The effect could be devastating for these companies, which rely primarily on donations and grants to fund their operations. They could be on the hook for buying insurance for volunteers — a benefit that could cost nearly $300,000 for companies with just 50 volunteers. Some are worried that they would have to cut volunteers or even shutter firehouses if they are forced to provide health coverage starting in 2015. The fallout will be on communities that depend on these companies to fight fires and respond to other emergencies.

Mann estimates that a majority of the state's 2,100 volunteer companies could be forced to buy insurance for volunteers. There are more than 100 municipalities with volunteer fire companies in Allegheny County.

About 250 volunteers provide most of Monroeville's fire and rescue services. None is paid, and the department barely gets by each year on donations, grants and $9,500 from the municipality, said Ron Harvey, chief of one of Monroeville's five fire stations.

“If they force that (health insurance) down our throat, we lock the doors and we all go home,” Harvey said.

Employers this year were paying $5,900 on average to provide health insurance for a single worker, and $16,000 for family coverage, according to the Kaiser Family Foundation. Using Kaiser's numbers, a group of 50 single workers would cost $295,000 a year to insure.

Bills have been introduced in the House and Senate this week that would exempt volunteer fire companies from the law's employer mandate, which kicks in on Jan. 1, 2015.

Rep. Lou Barletta, a Hazelton Republican, said he introduced a bill because the law could “close down fire companies and do real damage to public safety.”

Sen. Pat Toomey, a Lehigh Valley Republican, joined a bipartisan group in the Senate to introduce a similar bill. “Pennsylvania is fortunate to have so many dedicated volunteers willing to risk their lives for their fellow citizens, and the least we can do is help them keep their doors open,” Toomey said.

Toomey and Barletta oppose the Affordable Care Act.

The IRS declined to comment and referred the Tribune-Review to the Treasury Department, which is writing final regulations for the law's employer mandate.

In a written statement, the department said it is aware of the concerns of volunteer fire companies but declined to comment further.

Officials with the Department of Health and Human Services, which is in charge of implementing the Affordable Care Act, declined to comment.

Historically, the IRS has considered volunteer firefighters employees for tax purposes, regardless of whether they receive compensation, said Douglas Smith, managing shareholder of Downtown law firm Jackson Lewis PC.

Unless the agency updates its ruling or the regulations that are being written specifically exclude volunteer firefighters, “they're going to have to provide insurance to a group of volunteers,” he said.

Mt. Lebanon's staff of 17 paid firefighters is supplemented by about 50 volunteer firefighters, Chief Nick Sohyda said.

While Sohyda said he's “not panicking” over the situation yet, he said he will have to track the hours of all volunteers to make sure they are serving fewer than 30 hours a week — the threshold above which workers are considered full-time under the law and eligible for health insurance. That task alone would be difficult and costly, he said.

“What most fire companies would do is limit the number of hours to keep them under the threshold,” he said.

The effect could be blunted, however, since many volunteer firefighters have other jobs, which may provide insurance, he said.

Mann, the state fire commissioner, called the possible administrative burden a “management nightmare” and said limiting volunteer hours could reduce fire companies' ability to respond to emergencies.

“They've reached 29 hours; do I tell the volunteer don't come to the next call?” Mann said. “If I have that threshold of 50 volunteers, do I accept fewer applications? If the fire departments can't afford to pay for it, are the local governments going to pick up that expense? There's a lot of potential questions.”

But the only question for J. Edward Hutchinson, chief of Greensburg's fire department, is whether any elected politician would allow the law to hurt public safety. Hutchinson, a supporter of the law, said his department has 295 volunteer firefighters.

“I don't think this will ever happen because it's politics, and it means votes,” he said.

Alex Nixon is a staff writer for Trib Total Media. He can be reached at 412-320-7928 or anixon@tribweb.com. Staff writer Liz Zemba contributed.

Add Alex Nixon to your Google+ circles.

 

 

 
 


Show commenting policy

Most-Read Business Headlines

  1. Small retailers at intersection of social networks, foot traffic
  2. Iron ore price decline hurts U.S. Steel’s cost advantage over rivals
  3. 153-year-old Venango well pumps out oil, history
  4. Woman on dating site looks too good to be true: How to vet that pic
  5. In ‘StockCity,’ real investing like game
  6. Business Council for Peace program works to export profits, peace
  7. Highmark and UPMC feud over canceled physician contracts
  8. U.S. Steel reorganizes operating units
  9. Small businesses’ dilemma: Keep costly health care coverage or lose talented workers
  10. Test-tube tuna may be sea change
  11. Kennametal names replacement for retiring CEO
Subscribe today! Click here for our subscription offers.