Nationwide, more than 94 percent of employers with at least 50 employees provide medical insurance, according to the Kaiser Family Foundation. But many of them do not cover part-time workers. The financial burden may be particularly heavy for companies with a significant number of part-timers who work more than 30 hours a week and don't currently get health benefits.
Dorothy Cociu, president of Advanced Benefit Consulting and Insurance Services in Yorba Linda, says that a majority of her corporate customers are dropping spousal coverage entirely, "because they can't afford not to."
(Obamacare requires that companies offering health insurance must provide coverage of dependent children, but not spouses.) Most companies that offer employee insurance already have plans with benefit levels that exceed the minimum Obamacare requirements, and many of them are "reducing benefits like crazy" to manage their additional costs, she said.
"There are tough decisions that have to be made," said Cociu. "It is the law, and you have to find ways to make it work financially for you." But for the most part, she said, her clients don't want to cut their people from full-time to part-time hours to avoid paying for their insurance.
Some employers, however, are doing just that. Forever 21, the clothing retailer, decided recently to downgrade an undisclosed number of full-time staff members to just 29.5 hours. SeaWorld said it would limit part-time workers to 28 hours a week, down from a previous cap of 32.
But the strategy can backfire.
Peter Fresca, a benefits advisor at The LBL Group in Los Alamitos, a partner firm of United Benefit Advisors, said that one car wash he knew of had decided to limit employees' hours to 25 a week. But it ended up having to hire more people, because its existing workers had to take second jobs and no longer had the flexibility to take shifts that needed filling.
Other companies are going in the opposite direction. Faced with the onerous and expensive task of calculating every year whether employees with variable hours would be eligible for insurance under Obamacare, they are simply avoiding the hassle by upgrading them to full time.
A Disneyland representative dampened the notion that avoidance of administrative headaches was a factor in the amusement park's decision to upgrade part-timers to full-time status. But business consultants and benefit management companies say they are seeing companies make that calculation.
"In some service firms, efforts to track service can be expensive. So moving people into full-time status can dramatically simplify their administration," said John Haslinger, vice president of strategic advisory services for ADP, a national human resources and benefits administration company.
Another approach is the one followed by Trader Joe's: dropping coverage for part-timers and giving them some cash to help pay for health plans sold through the public insurance exchanges. In an e-mail first published by The Washington Post, a Trader Joe's executive suggested that it was acting in the interest of employees who do not make a lot of money and could obtain federal tax credits via the exchange to help pay for coverage.
"Somewhat by definition, the law provides those people a pretty good deal for insurance ... a deal that can't be matched by us -- or any company," the executive wrote. "However, an individual employee is only able to receive the tax credit from the exchanges under [Obamacare] if we do not offer them insurance under our company plan."
Indeed, many observers predict that the exchanges could prove to be better for lower-income working people than coverage offered by their employers.
"If exchanges are successful, it may turn out that employees will want to be in them. They may say, 'Gee, look at those costs. They are much cheaper than what I am getting,'" said Karen Marlo, vice president of the National Business Group on Health, which represents large U.S.employers in the health care arena. "I think in a few years out, things may evolve to a situation where employees are asking their employers to let them go there."
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