To Avoid Covering Health Care, Many Local Governments Cut Part-Time Employees to Fewer than 30 Hours
Many local governments across the country are reducing the hours of their part-time employees to avoid providing them with healthcare benefits once the new federal mandate kicks in.
Under the Affordable Care Act, employers will be required to cover healthcare insurance for part-time employees working 30 hours or more a week.
To get out from under this new requirement, cities and counties are trimming these workers’ hours so they have 29 or fewer hours per week.
Local officials say they must take these steps because of limited resources, even though the mandate won’t go into effect for another 16 months.
They say they must act now “either because of labor contracts that must be negotiated in advance, or because the local governments worry that employees who work at least 30 hours in the months leading up to the January 2015 implementation date would need to be included in their health-care plans,” wrote Reid Wilson wrote of The Washington Post.
In New Jersey, Middletown Township announced this week that it would cut the hours of 25 part-time workers to avoid up to $775,000 in increased annual healthcare expenses.
Out in Texas, Bee County officials decided to cap part-time employees’ hours at 24 per week beginning October 1.
“It’s not something we prefer to do, but the cost of health insurance is significant and would really impact municipal budgets,” Anthony Mercantante, Middletown’s township administrator, told the Post. “It’s not something we can take on, particularly when we don’t know some of the other ramifications of the Affordable Care Act. There are far more questions than answers right now.”
Mercantante said Middletown already doles out $9 million of its $65 million annual budget for health coverage.
Some experts disagreed that local governments will really save money from their actions.
“There are some costs of doing business where it really does cost you more money to have multiple people on the job,” Gary Burtless, a senior fellow of economic studies at the Brookings Institution, told the newspaper. “Why would you create more jobs than you need to at 20 hours a week, when if you’re really responding to the Affordable Care Act you would assign people to work 29 hours a week?”
“I don’t think this is going to be a big direct-cost burden for counties and municipalities,” Burtless added.
To Learn More:
Local Governments Cutting Hours over Obamacare Costs (by Reid Wilson, Washington Post)
Missouri Government Fights to Keep Health Insurance from Uninsured (by Matt Bewig, AllGov)
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