WASHINGTON – U.S. Senator Chris Coons (D-Del.) and seven of his colleagues wrote to Treasury Secretary Jack Lew on Monday to clarify the “Shared Responsibility” provision of the Affordable Care Act for volunteer first responders. Senator Coons is seeking to ensure that Delaware’s 6,000 volunteer firefighters and emergency responders are not counted as employees under the provision, potentially triggering the law’s coverage mandate for businesses with more than 50 employees.

“Many combination and volunteer fire departments are lacking the necessary guidance as to how they may be affected by Employer Shared Responsibility Provision of the ACA,” the senators wrote. “We believe that it is critical that volunteer firefighters and emergency personnel not be counted as employees as it relates to the ACA and any employer responsibilities to ensure the continuation of this important aspect of our public safety infrastructure.”

“Nominally compensated volunteers often have other full-time jobs which offer health insurance and generally do not have any expectation of receiving health insurance in exchange for their volunteer service.”

Most volunteer first responders have other full-time employment, and few receive even nominal compensation or financial benefit. Many emergency response agencies do not have the resources to provide pay or benefits to volunteers, nor do most volunteer first responders expect to receive compensation or health coverage as a result of their volunteer public service.

“The Fair Labor Standards Act (FLSA) and section 457(e) of the Internal Revenue Code (IRC) allow volunteer firefighters and emergency medical personnel to be nominally compensated for their service,” the senators explained. “However, the Internal Revenue Service (IRS) also tends to treat volunteers firefighters and emergency medical personnel as employees of the agencies that they serve for the purpose of taxing their nominal benefits. This however, leads to some confusion as to whether the classification of volunteer firefighters as ‘employees’ will also apply for the purposes of the Shared Responsibility Provision of the ACA.”

“We believe that it would be fair to use existing standards in the Internal Revenue Code to ensure that ‘bona fide volunteers performing fire fighting and prevention services, emergency medical services, or ambulance services’ are not defined as employees for purposes of calculating the shared responsibility provisions of the ACA,” the senators continued. “Properly distinguishing between full-time, paid emergency responders and volunteers is necessary if we want to protect essential emergency response agencies that keep our communities safe and protect over one-third of the U.S. population.” 

The text of the letter is below. It can be downloaded as a PDF here: http://bit.ly/Jsz2g7

December 16, 2013

The Honorable Jacob Lew
Secretary
Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, D.C. 20220

Dear Secretary Lew:

We write regarding the treatment of nominally compensated volunteer firefighters and emergency medical personnel under the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148). Many combination and volunteer fire departments are lacking the necessary guidance as to how they may be affected by Employer Shared Responsibility Provision of the ACA.  We believe that it is critical that volunteer firefighters and emergency personnel not be counted as employees as it relates to the ACA and any employer responsibilities to ensure the continuation of this important aspect of our public safety infrastructure.

Approximately 780,000 volunteer firefighters serve in 20,000 all-volunteer and 7,000 combination career-volunteer fire departments throughout the United States. Many communities rely exclusively upon volunteer fire departments for fire protection and emergency medical services.  In fact, ninety-two percent of the nation’s fire departments utilize volunteer personnel, whose donated services are estimated to be worth approximately $140 billion annually.

Many volunteer fire and emergency medical personnel receive nominal benefits, which boost recruitment and retention by demonstrating that their efforts are appreciated. The Fair Labor Standards Act (FLSA) and section 457(e) of the Internal Revenue Code (IRC) allow volunteer firefighters and emergency medical personnel to be nominally compensated for their service. However, the Internal Revenue Service (IRS) also tends to treat volunteers firefighters and emergency medical personnel as employees of the agencies that they serve for the purpose of taxing their nominal benefits.  This however, leads to some confusion as to whether the classification of volunteer firefighters as “employees” will also apply for the purposes of the Shared Responsibility Provision of the ACA.

We believe the allowances made in the FLSA and the IRC for individuals to receive nominal compensation in return for their service while still being classified as “volunteers” are critically important in the public safety community. Nominally compensated volunteers often have other full-time jobs which offer health insurance and generally do not have any expectation of receiving health insurance in exchange for their volunteer service.

We believe that it would be fair to use existing standards in the Internal Revenue Code to ensure that “bona fide volunteers performing fire fighting and prevention services, emergency medical services, or ambulance services” are not defined as employees for purposes of calculating the shared responsibility provisions of the ACA.  Properly distinguishing between full-time, paid emergency responders and volunteers is necessary if we want to protect essential emergency response agencies that keep our communities safe and protect over one-third of the U.S. population.

It is imperative that clarifying guidance be issued as soon as possible in order to provide clear guidance to combination and volunteer fire departments.

Thank you for your attention to this important matter.

Sincerely,

Mark R. Warner

Joe Manchin

Chris Coons

Mary Landrieu

Mark Begich

Susan Collins

Robert Menendez

Robert Casey, Jr.

CC: Thomas E. Perez, Secretary of Labor

Daniel I. Werfel, Acting IRS Commissioner