Final Regulations on Volunteer Firefighters and the Affordable Care Act

Most Minnesota cities will not qualify for the Affordable Care Act exemptions for volunteer firefighters.
(Published Feb 18, 2014)

The final regulations implementing a significant portion of the federal Affordable Care Act (ACA) were issued on Feb. 10. (26 CFR Parts 1, 54, and 301).

Based on initial reading of these final regulations, it appears that only those fire departments with “bona fide volunteers”—volunteers who receive only very minimal compensation, if any—will be exempted from certain provisions of the Affordable Care Act.

In Minnesota, we have very few bona fide volunteer firefighters left. Most of our departments have what are typically called “paid on-call” firefighters; they are considered under the Fair Labor Standards Act (FLSA) to be employees because they are often paid more than nominal amounts. Many of them in the Twin Cities area, for example, receive a higher hourly rate than minimum wage.

Some cities continue to refer to their departments as “volunteer,” but in the eyes of the law, these employees will not likely meet the definition of bona fide volunteers—either for purposes of the FLSA or for the ACA, which define the terms similarly. Only departments that provide a fire relief association pension and very little, if any, other compensation or benefits are likely to meet the definition of “bona fide volunteer.”

The major implications of this for cities are:

  • Paid on-call firefighter hours will be counted when determining whether the city is a large vs. small employer (this will push many cities into the large employer category when they otherwise would not have been).
  • Those cities with “duty crew” shifts (firefighters who work a specified shift at the fire station to ensure coverage, usually in the daytime) will likely have some volunteer firefighters who work more than 30 hours and will eventually qualify to receive group health insurance under the ACA.

Cities have the option to keep all firefighters scheduled at less than 30 hours if they wish to avoid the penalties specified under the ACA, which in some cases could be less expensive than providing insurance to these employees. However, the final regulations do provide a one-year delay on penalties (until 2016) for cities with between 50 and 99 employees, under certain conditions. One of those conditions is that the city must not reduce the size of its workforce or the overall hours of service of its employees during the period beginning on Feb. 9, 2014, and ending on Dec. 31, 2014, in order to remain in the 50-99 employee category.

For more information on these newly issued final regulations, please visit the League’s health care reform web page or contact the League’s HR Department at hrbenefits@lmc.org or (800) 925-1122.

Finally, if your city has not yet taken advantage of the free half-hour phone consultation on health care reform with Gallagher Benefits available through your League membership, please contact the HR Department for assistance with scheduling that.

Read the current issue of the Cities Bulletin

* By posting you are agreeing to the LMC Comment Policy.