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Jan 8, 2014

Here’s a question I bet you never thought you’d ask yourself: Will I have to provide health insurance to my interns?

With the Affordable Care Act changing the way employers provide health benefits to their staff, it’s a valid concern.

At what point should you, if at all, provide health coverage to your interns? Will the ACA mean you may face legal ramifications if you don’t provide benefits? Or is it matter of looking at your internship program and adjusting as needed?

I talked to Mike Haberman, a legal expert and co-founder of Omega HR Solutions, to gain some insight on this unusual take of the ACA. Here are some thoughts:

The ACA may change health coverage for your employees

By now, you’re likely aware that the ACA kicks in at 50 employees. If and when the ACA goes into effect in 2015, this will include part-time workers, seasonal employees, and it would seem interns.

Haberman notes that companies who sit close to the 50-employee mark will be in risk of going over the line by hiring more interns. In these instances, the ACA could dramatically change the cost-benefit analysis of hiring interns or force companies to choose between hiring more interns or hiring seasonal employees.

Costs associated with the ACA could influence intern policies

The ACA seems like it will apply to all full-time employees, meaning employers would have to offer anyone who works over 30 hours a week health insurance. Since most students and young professionals are required to have coverage by their university or should be covered by their parents or guardian’s plans, many will not need health insurance from an employer.

That being said, Haberman believes that, even if a fraction of interns need health insurance, the cost and headaches of implementing health coverage would dramatically impact the cost of running an intern program.

If the U.S. Department of Labor looks to enforce the ACA when it comes to interns, it could force a lot of employers to offer internships that only run for 30 hours a week, which is a huge change to current internship policies and would limit time spent learning and developing professionally.

Remember: Internships are typically short-term commitments

I do not believe interns should receive health insurance, and neither do most major employers. While I do maintain that interns should be compensated for their work, the fact is, many interns are typically three- to four-month termed employees.

Most employers are not looking to hire interns long-term, which means temporarily providing coverage is not a good source of health care support for students and young professionals.

Haberman points out the intent of the law clearly shows the ACA is meant to help younger students (up to age 26) to be covered by their parents or guardian’s plans. The fact that interns would need to be covered is an error not properly accounted for in the ACA — and would cost employers undue headaches.

That said, I do believe interns who are kept on board for longer than six months should be covered. Internships are meant to be short-term educational experiences; employers should not use the role of an intern to exploit the ACA and not provide benefits to employees.

Consider alternative benefits for interns

Employers should always pay students at least minimum wage. Beyond this, our 2013 summer intern report clearly showed that what students care about most is real project experience and the opportunity to develop professional skills.

In addition, compensating students with training workshops in software and skills like Salesforce, copywriting, WordPress, or whatever is the most relevant in your field is also beneficial. You should also create full-fledged projects that students can work on from start to finish to add to their portfolio.

While the outcome of the ACA may or may not affect your internship program, it’s important to stay informed and knowledgeable about the new healthcare act. If and when the time comes, you’ll be able to provide benefits to your team as needed.

What do you think? What does the ACA mean for your internship program?