Beginning in January 2014, employers with over 50 full-time employees will need to offer health insurance or pay a fine. But, this only applies to employees working 30 hours a week or more. A disturbing trend is starting to form in which low-paid employees are having their hours reduced to 29 hours a week or less to allow the employer to avoid providing health insurance or paying the fine. The 30-hour limit is a loophole that should be fixed.
A recent story indicates that Regal Cinemas is in the process of cutting back thousands of its employees’ hours to avoid the health insurance mandate.
The Kaiser Family Foundation reports that stock prices of staffing companies are soaring since these companies may become key players in helping employers avoid providing health insurance or paying a fine. This will potentially involve using complex IRS regs to classify people working 40 hours a week or more through a staffing agency as under the 30-hour/week line for health insurance:
Little-known, complex rules developed by the Internal Revenue Service could allow even some full-time jobs placed through temp agencies to come without health benefits.
Don't ask me how that scheme works, I don't know except to say Voldemort is apparently alive and well.
As noted in another diary, many colleges such as Hudson Valley Community College are moving to cut the hours of their adjunct professors. So much so that the American Association of University Professors has issued a statement strongly opposing this “reprehensible” practice.
There are many other examples, and we’re not halfway through 2013, with 2013 being the year employers need to decide on how to expand health coverage or, as described above, how to screw over their employees (or at least some of them).
I don’t think this is fair, and it isn’t what was intended by reformers. The people being affected by this are getting a double whammy: (1) they didn’t have health insurance before, and they’re not getting it now; and (2) many were getting by in generally low-paid jobs on 40 hours per week, and now have to make due on 29, more than a 25% pay cut. I would think many of these people will need to cobble together 40 hours or more a week through multiple part-time jobs, if they can find them.
I think the solution is simple theoretically, and difficult practically. Actually the simplest solution is single payer, but that's for later. The solution to the problem at hand is to require large employers to pay for the proportion of the health coverage (or fine) that relates to the amount of the employee’s time worked for that employer. Under current law, the fine for a 30+ hour employee is $2,000, but for a 29-hour employee it’s $0. That should be changed so that the fine for an employee without health coverage is $50 (1/40 of $2,000) for every hour the employee works per week on average. Normal payroll systems can handle this calculation easily, and it removes the incentive to game employees' hours.
The hard part is what you already know – lobbyists, campaign contributors and so representing on who would do everything they can to stop this from happening. It won’t happen quickly, but with effort it could happen eventually. Their biggest complaint is that businesses will have to raise prices to pay the extra costs. Of course they will, it’s like any other expense. I don’t mind paying an extra quarter or whatever for a Big Mac. And no one will be at a disadvantage if everyone has to play by the same rules.