Agriculture comprises about 11% of employment in the U.S.,1 representative of an active food supply chain ramping up to feed a growing planet.

But U.S. farmers and agribusinesses suffer from a shortage of workers, largely due to the pandemic and the inability of migrant workers to cross into the U.S. for seasonal work.

Historically, immigrants account for 73% of the agricultural labor force.2 In recent years, however, agribusinesses and famers have struggled to find enough workers as volatile commodity pricing and the physical rigors of the job have discouraged second-generation American farmers and immigrant children alike from working in agriculture. 

And the high demand for and low supply of labor is driving something previously unheard in the industry: expansion of employee benefits for labor-intensive agribusiness jobs.

Using voluntary benefits to attract workers

All agribusinesses with more than 100 employees are required to offer medical benefits under the Affordable Care Act (ACA), which is separated into Part A (Minimum Essential Coverage) and Part B (affordable major medical).

These two elements of mandated coverage only cover health insurance, and agribusinesses are offering insurance benefits to fill in the gaps in mandated Part A and Part B coverage (see full explanation below). Common voluntary benefits for agribusiness workers include:

  • MEC/Limited medical (hospital indemnity)
  • Accident coverage
  • Critical illness and disability insurance
  • Life insurance
  • Dental and vision coverage
  • Identity theft protection

Voluntary benefits are free for businesses to offer (in which case, workers’ pay the bill). Even so, workers in agriculture still consider voluntary benefits an attractive perk, as they can access benefits considered standard in other industries.

Customized for the population and designed to be affordable and add value, voluntary benefits help employers reduce turnover and stay competitive without added costs.

Benefits for farm workers under the ACA

As agribusinesses consider voluntary benefits, it’s worth explaining what they’re mandated to offer under the ACA. Without full compliance with the ACA, agribusinesses not only risk losing workers, but government fines: Businesses with more than 100 employees that don’t offer Part A and Part B coverages are subject to penalties totaling thousands of dollars per worker.

Two parts of the Affordable Care Act (ACA) affect agribusinesses: Part A details Minimum Essential Coverage, while Part B deals with major medical.

Part A: Most agribusinesses offer Part A, a minimum essential coverage based on the ACA. Agribusinesses can make buy-in voluntary and are not required to financially contribute to it. If employers don’t offer Part A, they face fines of $2,700 per employee.

Part B: Part B requires employers to provide the lowest-cost major medical coverage that does not exceed 9.83% of a worker’s salary. The government levies severe penalties to businesses that do not offer Part B coverage — and the government keeps track of who enrolls, based on which workers receive a subsidy. Businesses that do not offer a minimum-value plan face fines of about $4,060 per employee.

When it comes to defining a full-time farm worker, it can be complicated. Under the law, a full-time employee averages 30 or more hours of service per week, or 130 hours per month. For variable-hour employees, eligibility measurement is not always straightforward.

Agribusinesses can determine a seasonal employees’ full-time status by counting each of the employee’s hours of service using one of two “equivalency” measurement methods: monthly and look-back.

The look-back measurement method determines full-time status for a longer period of time based on average hours of service during a prior period. The monthly measurement method determines full-time status for each calendar month based on the employee’s hours of service in that month.

Contact your HUB Agribusiness expert for more information and insights on leveraging benefits for employees.

1 U.S. Department of Agriculture Economic Research Service, “Ag and Food Sectors and the Economy,” December 16, 2020.

2 Agamerica Lending, “The U.S. Farm Labor Shortage,” February 26, 2020.