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Unintended Consequence: Thanks To Healthcare Law, Many Employees Are Seeing Hours Cut

Even before it is fully implemented, the Affordable Care Act has exhibited several job-killing qualities, including adding cost and creating uncertainty for businesses.

The most immediate and widespread harmful result, though, has hit many parttime workers across the country, from school employees to waiters, who have seen their hours cut to avoid hitting the law’s 30-hour definition for “full-time” work.

It’s the very definition of an unintended consequence: A rule ostensibly designed to ensure that those working nearly full-time get health-care coverage instead has incentivized employers to reduce hours to avoid having to incur the cost of providing insurance.

And it’s hard for the law’s supporters to pin it on big, bad corporations– public school systems and nonprofit institutions are those doing it.

For those employees still lucky enough to be getting more than 30 hours of work a week, the “benefit” will be their employer offering an insurance plan made unaffordable by all the bells and whistles it must now include, thanks to the Affordable Care Act.

In a recent op-ed in The Wall Street Journal, Andrew Puzder, head of fast-food operator CKE Restaurants, explains why: “The lowestpaid employees who qualify for ACA coverage … earn about $11,500 per year.”

Under the individual mandate set to take effect in January, if they decline to buy coverage, in the first year they would be subject to a penalty of $115, Puzder writes.

The cost of their share of premiums, meanwhile, would be an estimated $1,091.55 per year.

That’s an easy financial decision for a young person without serious health problems to make.

“The economically rational decision for young people, like our crew employees, is to pay the penalty and forego the insurance,” Puzder writes.

“Despite what the government may believe, our employees are smart enough to figure this out.”

The upshot if the law isn’t changed, Puzder and others say, is that the ACA will harm, not help, those it was supposed to aid, because it will reduce many workers’ hours and eliminate the ability of employers to offer to other employees lowercost plans that offer morebasic coverage.

As with other areas of the badly conceived and hastily enacted legislation, lawmakers now are scrambling for a fix.

A bipartisan bill is in the works in the Senate to address this issue, which has started to be reflected in employment data as well as anecdotally from many businesses.

Joe Donnelly, a Democratic senator from Indiana, and Susan Collins, Republican senator from Maine, wrote in The Wall Street Journal recently about their “Forty Hours is Full Time Act of 2013.”

Just as the name suggests, the legislation would define full-time work as the 40 hours that traditionally has been considered full-time for decades; the senators say the bill was the result of hearing from many businesses that they were cutting hours, forgoing hiring or both ahead of the ACA’s implementation.

As a businessman, Puzder says he mainly wants certainty and rules that make sense.

Rather than changing the law “by fiat” as Obama recently did in delaying the employer mandate, Puzder says, “Maybe the administration will even do what it should have done in the first place: Take the time to develop a bipartisan, market-driven approach that might actually work.”–Columbus Dispatch

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