Worker Classification Issues Are Raised By Affordable Care Act Proposed Regulations

Several comments filed by various industry groups on proposed regulations issued in January by the Internal Revenue Service have focused on worker classification ambiguities that are embedded in the "common law" standard for distinguishing between "common law employees" and bona fide non-employee service providers.  The IRS had issued proposed regulations under the excise tax provisions of the Affordable Care Act (i.e., "Health Care Reform" or "Obamacare"), found in section 4980H of the Internal Revenue Code, on January 2, 2013.  The comment period for the proposed regulations ended March 18, 2013.  A hearing on the proposed regulations is currently scheduled for April 23, 2013.

The employment status of service providers is a critical factor in determining whether an employer is large enough (generally, 50 or more full-time equivalent employees) to be required to provide health care.  Employment status is also relevant to determining whether a "large employer" is