Indiana University Bloomington

IU: Manpower move not just about health care

  • Sept. 26, 2013

By Jon Blau

Indiana University’s contract with a temp agency to handle 50 workers has specific language obligating the agency to be solely responsible for health insurance costs mandated by the Affordable Care Act.

At the same time, the university argues that this move, which effects less than 8 percent of workers of its physical plant department, has been oversimplified in the midst of public outcries about the layoffs, played as an attempt by IU to avoid paying health insurance for employees when those employees hadn’t been and never were going to be in line for those benefits at IU.

“With ACA coming and the additional work that comes with it in terms of tracking these employees, the physical plant felt that was one more reason to go ahead and pursue the path it was headed down with Manpower, but it wasn’t the only reason,” IU spokesman Mark Land said.

“An even bigger reason for going with Manpower was the recruiting and onboarding of employees in this group. Because of the seasonal nature of the work, this tends to be a higher turnover employee group and Manpower is better equipped, in the eyes of the physical plant, to handle these activities efficiently.”

A shift of 50 of the physical plant’s 650 employees to Manpower this week comes ahead of the implementation of the Affordable Care Act in 2014. The employer mandate to provide health insurance to employees averaging 30 or more hours per week will not be enforced until 2015, but “look back” provisions in the Affordable Care Act allow employers to determine who will be eligible for coverage based on 2014 data.

Shifting these workers now relieves the university of the burden of counting hours for this seasonal group of workers, which can approach 40 hours some weeks but only be a fraction of that during other times of the year. Paperwork handed to employees making the switch cited the new health law in the first answer to a “frequently asked questions” list about why the move was occurring: “The IU Physical Plant is interested in providing our full-time temporary employees with a better benefit plan as well as meeting our legal obligations as outlined in the Affordable Care Act.”

According to IU’s contract with Manpower, maintenance support workers will continue to earn $9.25 an hour and the university will be on the hook for additional 37 or 42 percent fee for custodians and maintenance workers, respectively. The fee covers the temp agency’s administrative costs as well as benefits for these workers. Manpower will make all “shared responsibility payments required under the Affordable Care Act,” according to the contract, as well as handle unemployment and workers’ compensation claims and contributions to the Public Employees’ Retirement Fund (PERF).

Land said contracting with Manpower is expected to be “cost-neutral” for IU, partially because the university won’t be obligated to contribute 22 percent of wages for these employees for PERF and the Federal Insurance Contributions Act tax (FICA), considerations which are also covered as part of Manpower’s fee. The university also won’t have to spend time hiring custodians, a position of “high turnover” at the university, according to Land.

“We spend a lot of time trying to find good workers to fill these roles,” Land said. “Manpower will provide greater quality control in this area, since it is their area of expertise.”

IU has its own internal controls to avoid paying health insurance for employees -- a move that has already shifted many hourly employees on campus to less than 29 hours per week -- but the university chose a different path for these workers, Land said, who will be able to work more than 30 hours with Manpower and will be offered a benefits plan.

One concern of the employees making the switch was whether their time at IU, which could often be parlayed into a full-time position over time, would be lost. But Land describes the move as little more than a switch in name only, and while they might not officially have an “IU identity,” they could become IU employees because Manpower’s performance tracking system allows for “good visibility to strong performers.”

 Editor's note: This story from The Bloomington Herald-Times is being published here as a courtesy for readers of IU in the News.