Federal regulators have announced they’ll soon issue final rules on the so-called employer mandate of President Barack Obama’s health care law to exempt volunteer firefighters and emergency personnel, alleviating a key concern for thousands of cities and counties across the country that rely on volunteer personnel.
The problem was a clash between tax policy and the provision of the health-care overhaul that requires employers with more than 50 workers to provide health insurance, though that part of the law was delayed until 2015. The Internal Revenue Service has traditionally counted volunteer firefighters as employees for tax purposes because they often receive small stipends or other benefits to offset out-of-pocket costs. Fire lobbying groups asked the IRS and the Treasury Department in December to consider exempting volunteer fire and emergency personnel from the rule, arguing most volunteers have full-time work elsewhere and existing access to health coverage. The National Volunteer Fire Council argued requiring departments and the private nonprofits who run fire service in some places to pay for health care could mean reduced hours, scheduling constraints, closures in a worst-case scenario and other hindrances to public safety.
While they waited for federal regulators to act, they also pressed Congress, which now has two separate bills with wide bipartisan support in both chambers. Those bills would essentially accomplish the exemption that the Treasury Department just announced, said Dave Finger, the Volunteer Fire Council’s director of government relations.
“Basically what they did is take the language in the bill that was introduced and said, ‘We’re going to do this administratively,’ which is what we asked them to do back in December,” he said. “We feel pretty strongly that they’re going to issue the final rule and it will look right, and this issue has basically been addressed.”
Volunteers account for nearly 70 percent of the 1,129,250 total firefighters in the U.S., according to the Volunteer Fire Council. About 26,000 of the 30,000 total departments are either all or mostly volunteer-based. Some fire departments are part of a municipal or county government, but many are private nonprofits.
Treasury and the IRS reviewed the tax code and labor laws applying to volunteer fire personnel and issued a statement saying “the forthcoming final regulations relating to (the employer mandate) generally will not require volunteer hours of bona fide volunteer firefighters and volunteer emergency medical personnel at governmental or tax-exempt organizations to be counted.”
Finger said he took the term “generally” to mean the vast majority of volunteer firefighters won’t be counted, but the IRS has to account for instances in which a “bad actor or two” tries to abuse the system or for other unforeseen circumstances.
"For everybody who’s a volunteer, getting small amounts of compensation expected to make them whole for their out-of-pocket costs, those folks are not going to be impacted, and that was our goal the whole time," he said.