ACA Impact on Hours Worked: Anecdotal Evidence

VII. Key Issues: Regulation & Reform >> C. Health Reform >> Affordable Care Act (ACA) >> ACA Impact on Employment/Economy >> ACA Impact on Hours Worked: Anecdotal Evidence

 

Overview

Large employers with many part-time employees have announced plans to limit their employees to 25 hours per week in response to the ACA.

  • The New York Times (2.20.14) reports: “cities, counties, public schools and community colleges around the country have limited or reduced the work hours of part-time employees to avoid having to provide them with health insurance under the Affordable Care Act, state and local officials say.”
  • Wall Street Journal (4.13.14) reports: “Thousands of these so-called variable-hour employees—many of whom work on college campuses that don’t operate during summer months—could lose their benefits as employers use new formulas to classify workers as full time or part time. The distinction determines which employees are entitled to company-sponsored health coverage….A large portion of Sodexo’s 125,000 U.S. workers are variable, and about 10,000 of them are losing access to health insurance, paid vacation and sick days and other benefits available to full-timers….Other employers are likely to follow Sodexo’s lead in reclassifying workers as they get closer to the ACA’s Jan. 1, 2015 compliance deadline, said Gary Claxton, a vice president at the Henry J. Kaiser Family Foundation, who said that businesses sought clear guidance from government officials on how to handle workers with nonstandard hours.”

IBD’s ObamaCare Employer Mandate list details 401 employers as of 2.3.14 (the constantly updated list can be downloaded into an Excel file) that have cut work hours or jobs in response to the health law; the list includes more than 100 school districts.  IBD’s analysis shows that the number of such announcements steadily rose through June 2013, at which point they began to decline in the aftermath of the administration’s early July decision to delay the employer mandate for 1 year.   The New York Times (2.20.14) reports: “even after the administration said this month that it would ease coverage requirements for larger employers, public employers generally said they were keeping the restrictions on work hours because their obligation to provide health insurance, starting in 2015, would be based on hours worked by employees this year.”  Moreover, “as some government officials point out, businesses at least have the option of passing along some of the additional costs to consumers.” The following codifies some of the largest employers to have taken this step, along with the publicly-stated rationale for doing so.

Restaurants and Fast-food Establishments

Colleges That Rely on Part-time Instructors

Other Private Employers

State Government Employees

Local Government Employees

According to Washington Post, “Some local officials said the cuts are happening 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.”