Traverse City Record-Eagle


December 21, 2013

Fact Check: Are volunteer firefighters covered?

Q: Will the Affordable Care Act force fire departments to provide health insurance to their volunteers?

A: Not likely. The IRS has not addressed the issue, though it may shortly when it issues final employer rules. Even so, bipartisan legislation has been introduced to exempt such volunteers.

Full question

Will the requirements of the Affordable Care Act force volunteer fire departments to provide health insurance to their volunteers? If so, will the vast majority of volunteer fire departments be forced to end their services?

Full answer

Our email inbox has been inundated with similar queries about the impact of the Affordable Care Act on volunteer fire departments. The furor has been fueled, in part, by a Dec. 9 story in England’s Daily Mail, which carried the headline, “‘A public safety disaster’: Obamacare could force THOUSANDS of volunteer fire departments to close,” as well as one from Fox News Insider which ran Dec. 10 under the headline, “ObamaCare May Force Thousands of Volunteer Fire Departments to Close.”

The operative words in those two headlines are could and may.

Under the Affordable Care Act, businesses with more than 50 full-time workers (defined as those working an average of at least 30 hours per week) are required to provide health insurance to all of their employees or face a tax penalty of $2,000 per employee (minus the first 30 employees). That so-called employer mandate was postponed, and will now go into effect in 2015. The IRS has been mum on the issue of how the law relates to volunteers, which has gotten some volunteer fire company officials wondering whether that might mean they’d have to provide insurance to volunteers, or face a penalty.

The concern is not entirely unfounded. A longstanding IRS policy deems volunteer firefighters to be “employees” for tax purposes. That’s because some volunteer firefighters receive a small stipend for things like travel or other expenses.

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