I, as well as most Americans, have been watching the unfolding of the Patient Protection and Affordable Care Act, AKA Obamacare, on a daily basis. It truly is a moving vehicle. The latest detour of this vehicle was the announcement at the beginning of this month to delay the employer mandate until 2015. This was a foundation building block of the Health CareBill in that it required employers of 50 or more employees to offer health group coverage. This coverage had many guidelines and restrictions as far as its coverage and pricing. Any employers that did not comply with this were subject to a penalty of $2,000 per employee, not counting the first 30 employees.
In an effort to offset this, many employers, especially large employers, started downsizing manpower hours to under 30 per week. This magical number of under 30 was the number at which they did not have to offer this coverage to an employee. Even though this latest announcement has given these same employers some lag time of actions to lessen this impact; it may have come too late. I say this because this mandate was based on the number of employees in the last half of 2013 that had 30 or more hours a week of work. Prudent employers started at the beginning of this year to implement changes of hours to lessen this impact.
Examples of this knee jerk reaction was our Walmarts who have increased their “temporary worker force from 1 or 2 percent to just under 10 percent.
Last February, CY Farms in New York decided to downsize their production and staff by cutting 25 worker positions to fall under the 50 employees benchmark.
The state of Virginia passed a law in February limiting the hourly wage workers to 29 hours per week. This affected about 7,300 workers.
The school systems have been hit especially hard with this mandate. Arizona’s Maricopa Colleges cite plans to cut hours on 700 adjunct faculty and 600 part-time workers. Ironically they are “not postponing our decision in light of the delay,” said spokesman Tom Gariepy.
Ivy Tech Community College that now relies heavily on “adjunct faculty” has adopted a policy capping adjunct courses, since the spring. According to Director Jeff Fanter, the school does intend to “to stay the course and not bounce back and forth due to the mandate delay.”
According to Investors Business Daily, the average workweek for the nonsupervisory retail workers which reached a post-recession peak of 30.8 hours in January 2012, has steadily fallen to 30.1, as of June.
This is a small sampling of employer reaction and it will be interesting to see how this advances through 2014 an the employers continue changes to the delayed mandate.
The government indicates that they decided to delay this employer mandate due to the complexity and vast burdensome manpower and costs of complying with this law. They also indicate that bureaucratic issues still need to be ironed out and that the uptick in part-time, rather than full-time employment is not due to the 30 hour employee mandate issue.
This newly announced delay has fueled opposition against the law. Columnist Charles Krauthammer called the President’s 2010 health care reform law a “bait and switch” and said the administration’s recent move to delay the employer mandate is unconstitutional. The question is also raised as to the discretionary power to delay the employer mandate, but not the individuate mandate.
Rhonda Sheridan is a registered nurse and an independent health insurance broker agent with Sheridan & Associates, Inc., and can be contacted at email@example.com.
This is the second of an occasional series on frequently asked questions Sheridan receives about health care coverage reform.