This bill clarifies that contractors providing services to educational organizations must be treated as employees when determining the organization's responsibility to offer health coverage under the Affordable Care Act.
Steven Horsford
Representative
NV-4
The SCHOOL Professionals Act of 2025 clarifies how certain contractors providing services to educational organizations are treated under the Affordable Care Act's employer mandate rules. This legislation ensures that individuals working substantially like regular staff for a school are counted when determining if the educational organization must offer health coverage. This change aims to prevent schools from avoiding their employer responsibilities by classifying essential workers as contractors.
SCHOOL Act Reclassifies School Contractors to Trigger ACA Health Coverage Mandates
The aptly named SCHOOL Professionals Act of 2025 (Securing Continued Healthcare for Our Operations and Logistics Professionals Act) aims to quietly tweak the rules around who gets counted for employer-provided health insurance at schools and universities. Specifically, this bill focuses on the Affordable Care Act’s (ACA) employer mandate, which requires large employers to offer coverage or face penalties.
The Fine Print on Full-Time Status
Under Section 2 of the bill, if you are a contractor who mainly provides services to an educational organization, you now have to be counted as a “full-time employee” when that school calculates its total workforce size for the ACA mandate (Section 4980H of the Internal Revenue Code). This isn't about changing your job title or how you get paid; it’s strictly about how the school tallies up its headcount for the IRS. If enough contractors are added to the count, it could push smaller educational organizations past the threshold where they are required to offer coverage to avoid a penalty. This change takes effect the first month after the law is enacted.
Who This Hits and Why It Matters
Think about the folks who keep a university running but aren't on the direct payroll: the long-term IT consultants, the contracted maintenance crew, the specialized tutors, or even the logistics staff running the campus bookstore. If an educational organization relies heavily on these contractors, they now face a new administrative burden. They have to track these workers and include them in their ACA compliance calculations. For the schools, this means potentially higher costs—either paying penalties for not offering coverage to the newly counted employees or facing the expense of providing that coverage.
For the contractors themselves, the impact is mixed. On one hand, this move is designed to close a loophole, ensuring that essential workers are included in the health coverage conversation, which could lead to more people gaining access to employer-sponsored plans. On the other hand, the bill only mandates that these workers be counted for the employer threshold; it doesn't automatically grant them benefits. Plus, the vagueness of “mainly provides services under contract” (Sec. 2) could create headaches for both the schools trying to comply and the workers trying to figure out where they stand. Educational organizations might restructure contracts to try and stay under the radar, leading to instability for the contractors.