Dozens of representatives from fire companies throughout the state were in Elsmere Monday afternoon to laud a recent change that could save volunteer companies from facing possible financial ruin.
U.S. Sen. Chris Coons (D-Del.) had initially scheduled Monday's conference to discuss proposed legislation that would hopefully protect Delaware's 6,000-plus volunteer firefighters from being affected by the Affordable Care Act's "employer shared responsibility" provision.
On Friday, however, the Treasury Department announced it would work to reconcile a conflict in the federal tax code that would have required volunteer fire companies to count their firefighters as "employees."
That designation, according to the ACA, would potentially trigger the act's coverage mandate for businesses with more than 50 employees – a move that most fire companies could not afford.
Bowers Volunteer Fire Company Chief Phillip Pennington feels the cost to his department would have been considerable.
"We didn't sit down and tally up the cost because we wanted to see where it would go," Pennington said. "But it would have been very, very substantial."
Could the cost possibly have resulted in the closure of the 75-year-old Bowers company?
"As small a company as we are, yes, it could have," Pennington said.
"It was a real big concern," admitted Matthew Carey, fire chief at the Dover Fire Department. "We would not have been able to afford it for our 190 living members and the 60 to 70 that still ride the fire trucks."
If the health care mandate had not been changed, it's likely Dover's city council would have had to find ways to come up with the money to meet the ACA's requirements, Carey added.
"There's no way [the fire company] could have afforded it," he said.
Coons said that when he was approached by the president of the Delaware Volunteer Firefighter's Association, Rich Toulson, about the potential financial threat, he wanted to work immediately to find some resolution.
"Delaware has one of the richest, strongest, deepest traditions in its volunteer fire service in the entire country," Coons said. "We wouldn't be who we are as a state – a state of neighbors – without our 60 volunteer companies and our roughly 6,000 volunteer firefighters."
Coons said that while the Department of Labor does not consider volunteer firefighters "employees," the IRS does, creating the conflict that he said went too long without correction.
"Just about every Delaware volunteer fire company would have been on the hook," Coons said. "Virtually all of the volunteer fire companies in our state were not prepared for, or expecting, this unintended fiscal burden."
Coons' cosponsored legislation sought to protect volunteer fire companies by law and by pressuring the federal administration to address the legal disparity.
Page 2 of 2 - The Treasury Department's ruling, Coons said, protects the roughly 780,000 volunteer firefighters nationwide from being counted at "employees" for ACA purposes.
Under the original version of the Act, affected companies would have either had to scale back on personnel, provide coverage for all volunteers, or pay the penalty for not providing insurance, Coons said.
"I think this is an important step forward," Coons said. "This is a victory – a victory for volunteer fire companies, our communities and our state."
Toulson said that, had the Treasury Department not initiated the change in the ACA, certain companies would have faced "tens of thousands of dollars" in coverage costs or fines, leaving them struggling to find funds.
"This means quite a lot to the citizens of Delaware," Toulson said. "It certainly would have put our fire departments in new financial strain."
Fire Chief Michael Bundek of the 96-member Little Creek Volunteer Fire Company said the Treasury Department decision was greeted with a sigh of relief. Without the change, "We would have had to adjust expenditures and that would have had an impact on our fire, rescue and emergency medical operations," he said.
"To be honest, though, I never thought they'd keep it," Bundek added. "It was there in the back of my mind, but I was pretty sure we would end up being exempt because of the nationwide implications.
"I think they did the right thing by the fire service."