Skip to comments.US Cities Cut Employees' Work Hours to Avoid Paying for Obamacare
Posted on 08/26/2013 7:31:43 AM PDT by SeekAndFind
Local governments across the country are facing the dilemma of cutting part-time employees' work hours to below 30 hours a week to avoid paying the increasing cost of health care under the Affordable Care Act (ACA).
Even though the Obama administration has postponed, until January 2015, the employer mandate that requires all companies, school districts and municipalities to provide health care for employees who work 30 hours a week or more, or face a penalty of $2,000 to $3,000 per worker, many have decided to reduce their employees' work hours this year.
In Middletown, N.J., for instance, Township Administrator Anthony Mercantante told the Asbury Park Press that part-time employees' hours have been reduced since May 1 to less than 30 hours a week, because, he said, "it's not clear how far back the federal government will look at employee hours. So to stay on the safe side, the township is making the move to reduce hours now."
Township officials estimate that without adjusting employees' hours, heath care costs would have increased by $775,000 per year.
Under the ACA, best known as Obamacare, working 30 hours a week is considered full-time employment.
Last month, Florida Today reported that employees in Brevard County who work an average 30 hours a week are already having their hours cut to avoid the $1.38 million annual costs to pay for employees' health insurance under the ACA.
Brevard County Library Service Department Director Jeff Thompson told Florida Today that 37 of his department's employees have already had their hours reduced to 28 hours, opposed to the recommended 25 hours per week.
"Obviously, what I'm hearing is that people are unhappy," Thompson said. "They naturally were very concerned. It is regrettable."
The impact is also being felt in Bee County, Texas, where part-time employees' work hours will be reduced to 24 hours a week starting Oct. 1. Similar accounts can be found in Virginia, where thousands of employees who work 30 hours a week will also have their hours cut.
In Chippewa County, Wis., County Administrator Frank Pascarella told WPR that because of the costs of the ACA, the county is "restructuring the departments to eliminate three-quarter time positions, and basically go to a part-time position," in order to avoid $163,000 in added insurance costs under the new law.
Douglas County, Wis., Administrator Andy Lisak also told WPR that officials are even more worried about the ACA's tax on Cadillac health plans, which is the term used to describe health care plans that cost more than $10,020 per year. These plans are expected to be taxed at 40 percent. According to Lisak, the tax would cost the county an additional $300,000 by 2018.
The Christian Post reported last month that for employers who are already making adjustments before the employer mandate goes into effect, some are hiring more part-time and fewer full-time workers to avoid the mandate, while others might decide its best for them to dump their current health care plans and pay the fines instead.
Ironically, the U.S. Supreme Court decision that saved the ACA by finding that the individual mandate is constitutional might have made this decision easier for companies. The Court decided that the mandate was constitutional, but not under the Commerce Clause, as Congress intended. Rather, the fines, Chief Justice John Roberts wrote for the majority, are a form of taxation. The individual mandate is, therefore, allowed under Congress' taxing power.
While companies may be reluctant to avoid the employer mandate if it is considered breaking the law and subject to fines, simply paying a "tax" makes avoiding the mandate more palatable.
Some companies will find it more cost-effective to pay the tax and let their employees get the government-subsidized insurance than provide the insurance itself. This will further increase the costs of the law.
If I were a city or county administrator, I would be trying to outsource as much of the work as possible.
Obama care is going in the wrong direction. Those public workers could get health insurance if (1) it had a deductible of $2000 or so and (2) it was only for catastrophic illness and (3) they had to pay 25% of the cost. There's no reason for anyone to have more insurance than that, unless it's their choice...and they pay for it. JMHO
Obamacare failing!!! Freepers, Citizens, Democrats, Republicans, Conservatives, Union Members, Tea Party members, Americans all, etc., Obamacare and Obama are killing the USA economy and medical care in the USA!!! That is his goal!!! Couple this fact with his Black racist, rabble rousing over race...and you clearly see his true objective...Destroy the United States of America....which in his evil heart & soul, he hates!!! Wise up, folks....you been had by Obama and his America hating media goons!!!
Sign & Endorse the Lee/Cruz defund Obamacare petition, right now...TODAY!!!
Forget about all that bankruptcy talk going on in Detroit, Stockton, San Bernardino, etc.
Go on. Raise taxes.
-— Go on. Raise taxes.——
Raise the rate.to 100%. They’re leaving a lot of money on the table.
Great idea. Problem solved.
There is one other factor--what I've called "club pricing." The deductible shouldn't be eaten up by outrageous, cost-shifted overpricing. If the catastrophic insurance you buy also gets you a much-better than list price, I'm in agreement with you.
It is a shame that the cash market for medical tests, supplies, and services is so distorted that no one knows what anything really costs.
Saginaw MI. cut their full time work force from 500 to 20.
I hate to admit we partook in the money-saving benefits of an HMO, but it saved us a ton of $$$ with our first-born. She was a premmie, several weeks in the neo-natal ICU, otherwise healthy child.
We eventually got a bill for $28...only because the hospital mistakenly put the wife-unit in an upgraded room for a night by mistake. $28 was the differential.
That was the ONLY bill we ever received. I could’ve fought it because it was the hospital’s mistake. But hey, I’m a generous guy. I wrote them a check.
The funny thing is, we’d actually changed policies during open enrollment (to an 80/20 plan), but the kid got here early, just before the HMO expired. The HMO covered it all.
“If I were a city or county administrator, I would be trying to outsource as much of the work as possible.”
Outsourcing will likely not work because the costs associated with outsourcing will go up.
It’s another Democratic [sic] party success story!
To those effected who voted for LIBs/DIMs/nobama and other losers...Bwahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa!
The IRS precipitated the “early” shifting of full-time workers to part-time. They threatened employers with a letter indicating a fine will be assessed against them if they do it when Obastardcare is implemented, so they’re all using the extra year to avoid the fines by dumping the full-timers now rather than later.
Expect a MASS shortage of school bus drivers. Most except the lower pay with split shift (which is a pain in the butt) just for the benefits.
You didn't want to pony up an extra 28 bucks to get your wife the best room possible? Man, I hope you had a lot of flowers waiting for her when she got home, and you cooked all the dinners for a year.
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————”www.dontfundobamacare.com” or “dontfundit.com”-———————
“You didn’t want to pony up an extra 28 bucks...”
Now that you mention it...I’m kind of embarrassed. But, that was 24 years ago...maybe she’s forgotten it.
Nah, she never forgets...
I see it with dental. I don't have dental insurance. It's amazing when one makes a financial decision. Example a root canal plus a crown with "50% chance of success" (translation...we don't know if it will save the tooth or not) would've cost about $2000. An extraction cost $400.
People with dental insurance go for the crown-root canal, sometimes with a deductable coming close to the price of an extraction. People without dental insurance will more likely say "get that gold mine out of my mouth".
It's like that with anything that's insured. The desire of the medical profession to make profits has no check if the patient has no financial stake in keeping prices down.
That's why we shouldn't be forced into these crazy policies that cover everything. It'll cause medical costs and availability to spin hopelessly out of control.
Anecdotal....when I had the hospital stay from hell with pneumonia almost four years ago, there were Medicare patients using it as free room and board when they could come up with believable diseases....lovely roomates. (sarcasm)
Your observations about dental care are very relevant.
Dental insurance is a small test laboratory for looking at what ails the larger medical sector. There are some differences:
* A significant amount of dental care is not life threatening
* Dental care is generally a lot less expensive than significant medical care
* Bankruptcy causing dental catastrophes are rare
* Dental insurance has a much shorter history than medical insurance
* Dental insurance usually has a rather low payout limit.
That said, there are similarities that are very important. Like medical care, dental insurance became an employment benefit. Unlike medical care, dental insurance reached this status far more recently. Twenty years ago, I would just go to the dentist and pay my bills.
Now, I feel like its prudent to have dental insurance. I noticed that dentists raised their rates somewhere between 50 and 100% after dental insurance became common. The reason they did this was that the dental plans had to offer a discount from the “list rate.” Worse, dentists who signed on with dental insurance companies (and most of them felt they had to) had to sign contracts where they would agree not to make side deals with the uninsured.
In effect, dental insurance created “pricing clubs” in a matter of a few years. There were fewer direct negotiations with the uninsured than with hospitals, because even though the uninsured were being overcharged, they could usually pay the inflated rates.
Unlike medical insurance, most dental plans are capped (pun, sorry) at around $1200 per insured. So, in effect, dental plans are mostly a combination of pre-payment for the cleanings you are going to have, with a payout cap that might cover a filling or two. They embody two of the features of what is currently called medical insurance: prepayment for expected care (which really isn’t insurance), and a pricing club.
What they don’t give is catastrophic coverage.