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.

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.

Last 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.

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."

Carlise Fire Company Vice President and Kent County Director of the Delaware Volunteer Firefighters Association Glenn Gillespie said that if Carlisle had to fund health insurance for its 64 active volunteer fire fighters and more than 30 members of the Ladies Auxiliary, that the fire company would have spent more than $13,000 annually. With Carlisle's annual fund drive averaging $47,000, a quarter of the company's income would have to be earmarked for ACA expenses.

"It would have had a tremendous impact on us. With the ladies auxiliary, you're looking at 90 plus volunteers," Gillespie said. "Looking at a quarter of our annual revenue that would have to be earmarked to the health care act would significantly affect other areas of operation that would have to be reworked. [There would be] tremendous cutbacks on operations and maintenance of the building, our equipment, fuel for our trucks, paying utilities, personal protective equipment and other tools the fire company needs for them to perform their jobs."

Carlisle Fire Company is a medium-sized fire company, Gillespie said, and while it would have faced significant financial strain, Gillespie said that it's the smaller companies that would have been most significantly affected, possibly resulting in closure.

Ellendale Volunteer Fire Company Chief Andrew Jones agreed that if his company had to provide healthcare for its 50 volunteer firefighters that it would have closed their doors and reduced services to the area.

"It would have really affected us because there's no way that a volunteer organization could pay for healthcare for everybody," Jones said. "Basically, we would have had to shut our doors and it would fall on the tax payers because we've have to hire and there would be no more volunteers."

Coons' cosponsored legislation sought to protect volunteer fire companies by law and by pressuring the federal administration to address the legal disparity.

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."

"There is no doubt the exemption of the volunteer fire service just in Delaware has prohibited fire stations from closing that would have resulted in an additional tax burden to ensure fire companies throughout Delaware remain open and performing the duties that have been providing the citizens for over 200 years," Gillespie said in an email. "It was a tremendous weight lifted off our shoulders."

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."