Tag: part-timers

The ACA and part-time employment

June 11th, 2014 by
Is Lady Liberty coming to kill your job?
Is Lady Liberty coming to kill your job?

The Affordable Care Act requires employers to provide coverage for full-time employees but not part-timers. That sounds like a straightforward and reasonable provision, but as usual the devil is in the details. ACA opponents have taken up the argument that this provision is a “job killer” because it will cause employers to limit employees’ hours, thereby pushing people into part-time roles to deprive them of benefits. That view strikes me as simplistic, since in my experience companies are in business to make money, not to hammer their employees.

I had an opportunity recently to chat with some HR heads from big employers –retailers and restaurants—that employee many part timers as well as full timers. I asked them for their take on the controversy. Unsurprisingly they provided a pragmatic, non-political view of the situation.

Here are the main takeaways:

  • Prior to the ACA, each company had its own definition of full and part time. As a rule they knew who they intended to pay benefits to and who not
  • The ACA is causing them to track hours of part-timers closely, with the goal of not inadvertently having to pay benefits to someone they don’t consider full time
  • The result is that work hours are being spread around more evenly among part-time workers whereas in the past some part-time workers got a lot of hours while others had fewer
  • From the standpoint of corporate HR, this is a good result, because part-timers who are assigned more consistent hours are more likely to stay. This increase in retention is good for productivity and profits. In this case the ACA is reinforcing an HR best practice that companies have started to implement in any case
  • Companies have not been trying to take away benefits from those who had them prior to ACA implementation

It’s arguable that the losers here are the few part-time employees who used to get lots of hours because their managers preferred them. Some of those are likely to make the jump to full time. Others may seek opportunities elsewhere.

These discussions are about the short term. Longer term it’s possible that employers will take the ACA into account when designing the structure of their workforce. Still, it’s just one factor among many.

photo credit: dullhunk via photopin cc

By healthcare business consultant David E. Williams of the Health Business Group

Target cuts health benefits; I discuss on Al Jazeera

January 22nd, 2014 by
Good jobs with good benefits?
Good jobs with good benefits?

Tune in to Real Money with Ali Velshi at 7 pm EST on Al Jazeera if you’d like to watch me talk about Target’s decision to stop offering health benefits to part-time employees.

Of course the mainstream news angle is that Target’s benefit policy decision shows yet another flaw in the Affordable Care Act (aka ObamaCare). People are losing coverage, all because of the new rules. I really don’t agree with that.

Here’s my take: Target’s move is upsetting for those who are directly affected, but it’s not evidence of any failure of ObamaCare. Benefits plans for part-timers usually do not provide generous coverage, payroll deductions are too costly for workers living paycheck to paycheck, out-of-pocket expenses deter patients from seeking care, and many employees lose their insurance when they get sick because they stop being able to go to work. As a result, not many people enroll in the plans even when they have access, and those with coverage can’t always make use of the benefits.

The Affordable Care Act is a great boon for part-time employees, especially low wage ones. Here’s why:

  • Many part-timers working at retail will qualify for Medicaid. A cashier making $8 per hour for 20 hours per week will make about $8000 per year and fall well under the income limit to qualify. With Medicaid they will have comprehensive coverage and pay almost nothing. And what if their state decided not to except the Medicaid expansion? Well, that’s not the fault of ObamaCare
  • Those with somewhat higher incomes will be able to buy insurance on a public exchange where they will qualify for premium subsidies and –in many cases– help with out-of-pocket expenses as well
  • Workers will be able to cover their families, not just themselves
  • If they change jobs or stop working they won’t lose their insurance

As others have pointed out, employers might have an incentive to keep part-timers below the full-time threshold of 30 hours per week in order to avoid the employer mandate. But Target has said they are not doing this, and you don’t build a great company by treating your employees badly. But the good news is that part-time workers now have good alternatives to employer-sponsored coverage, which was lacking before.

photo credit: Patrick Hoesly via photopin cc

By David E. Williams of the Health Business Group.