There were many concerns that arose when the Affordable Care Act, also known as ObamaCare, was passed. One of the topics of discussion was the effect ObamaCare would have on the workforce.
Prior to the ACA, employers could decide whether or not to offer health insurance to staff. Some companies offered insurance to all employees, including part-time staff. Most offered insurance to only full-time staff – generally defined as those that worked 40 hours or more per week. Some companies offered no insurance to any employees.
The ACA mandated that employers with 50 or more full-time equivalent (FTE) staff had to offer health insurance to full-time employees. It also redefined “full-time” employees, for purposes of offering health insurance,as those that worked 30 hours or more each week. ObamaCare has given time for employers to respond to this aspect of the program – the requirement will be in place for employers with 100 or more FTEs as of January 1, 2015, and it will be expanded to include employers with 50 or more FTEs beginning January 1, 2016. However, this still has a significant impact for businesses and workers.
ObamaCare and Full-Time Employees
Full-time employees that have already received health insurance will likely not see much difference as a result of the mandate, though employers often makes changes to their health insurance offerings, in part to deal with rising costs. However, many companies who didn’t offer any insurance will be required to do so. The insurance coverage must meet the minimum essential coverage requirements, cover dependents up to age 26, and not require employees to contribute more than 9.5% of their income for the lowest-cost individual plan. This is a huge financial impact to many employers, especially smaller businesses.
Some employers are responding by reducing employee hours below 30 per week. They likely still have enough FTEs to be required to offer coverage, because two half-time employees count as one full-timer. However, only full-time employees must be offered health insurance. Proponents of the ACA are frustrated because this seems to be circumventing the spirit of the law. Opponents of the ACA point to this trend as a negative impact of the law.
ObamaCare and Part-Time Employees
The ACA does not penalize businesses for not offering health insurance to part-time employees. Unfortunately, this puts part-time workers at a disadvantage. These individuals are still required to have health insurance and will need to find their own way to acquire coverage.
Fortunately, the Marketplace provides financial assistance with monthly insurance premiums to those who make between 100% – 400% of the federal poverty level. This sliding scale subsidy means that those with income at the lower end of this range will receive more assistance. In addition, those who earn between 100% – 250% of the federal poverty level will qualify for assistance with cost-sharing, such as copayments and deductibles. For the next enrollment period, the 2014 poverty level will be used, which is $23,850 for a family of four.
As with all legislation, the true results of the ACA will take time to see. There are concerns that the mandate for full-time staff to have health insurance will cause more employers to cut worker hours below 30 hours. Employers are required to offer part-time employees coverage under ObamaCare, so they will have to find their own way to get coverage if their employer doesn’t offer it. Fortunately, the Marketplace offers financial assistance to lower to middle-income Americans. Whatever the workplace situation, making health a priority will help America move into a brighter future.