One of the biggest complaints about the new federal health care law has been that it could lead employers to hire part-time and temporary workers to avoid providing insurance.
So far, it’s not happening.
It clearly makes a good talking point for people who want to create fear and anxiety about the Affordable Care Act, said Washington and Lee University law professor Tim Jost, one of the country’s leading experts on the new law. But I think it is largely untrue.
The suggestion that employers are headed toward larger part-time and temporary work forces, one often leveled by conservative critics of the health care law, is based on surveys like one by the human resources consulting company Mercer.
Last November, a Mercer survey of 1,215 businesses found that 12 percent of them were likely to have fewer employees work more than 30 hours a week. Generally, employees working fewer than 30 hours a week or fewer than 90 days are not covered by the health care law.
Most experts say the collective impact won’t be measurable for a few years.
Ameriprise Financial senior economist Russell Price said it is too soon to judge.
It will be limited to certain industries, like restaurants and retail, he said. But overall, the economy is improving and should pick up in 2013.
Price believes any reductions in hours or increases in part-time or temporary hiring will be overcome by the broader momentum in full-time employment.
Officials at Mercer expect the percentage of companies that actually adopt part-time and temp-hiring strategies to evade coverage requirements to be less than 12 percent, because of productivity and quality risks.
Aon Hewitt, one of the country’s largest human resources consultants, conducted a national survey of 562 employers near the second anniversary of Obamacare’s passage and found that 94 percent are committed to offering and financially supporting health benefit coverage for their workforce in some form going forward.
Beginning in January 2014, the Affordable Care Act generally will require employers with more than 50 full-time equivalent employees to offer adequate and affordable health insurance. Those that don’t face penalties if one or more of their uninsured employees gets government-provided premium tax credits when buying coverage through an individual health insurance exchange.
The penalty is generally $2,000 a year for each full-time employee, excluding the first 30 workers, for employers that offer no health insurance at all. Employers that offer health insurance that the government judges inadequate and unaffordable may be penalized $3,000 for any single full-time employee who receives premium tax credits through the exchange.
Jost believes some employers of low-wage workers whose workforce is now close to but fewer than 50 full-time employees may cut hours or keep new hires from working more than an average of 30 hours a week to keep from being legally forced to provide insurance.
In low-wage and retail industries, there may be an incentive to shift workers to part time, agreed Larry Levitt, a senior vice president with the Kaiser Family Foundation.
Levitt said trying to avoid paying for employee benefits by hiring part-timers predates the Affordable Care Act.
The health reform law will further that trend, he said. But there are limits. You can’t make everyone part time. For a business to operate efficiently, that’s just not possible.