Retail store chain Target Corp. is dropping its health care plan for part-time workers, citing low participation and saying its workers will be better off applying for coverage under the Obamacare insurance exchanges.
In a blog post Tuesday, Jan. 21, 2014, the Minneapolis-based retailer said it will ease the transition by doling out a $500 cash payment to each employee who loses coverage.
Part-time employment for economic reasons at least partly surged because of the Recession, and part-time employment has grown for decades, so again, we cannot be certain that the most recently increase in part-time workers is statistical noise or a signal of Obamacare’s impact. Moreover, researchers at the Center for Economic and Policy Research (CEPR) found that although some workers are losing hours of work as employers seek to evade Obamacare, this impact is allegedly too small to worry about.
Even so, there are an enormous number of stories about real-world employers who in fact have shifted to part-time workers precisely to avoid the Obamacare mandate. And when one compares the changes in part-time employment to the changes in full-time employment, for every new FT job added to the economy in the first six months of 2013, there were 4.3 PT jobs added! In most (non-negative) years, the ratio is the reverse: that is, there are typically 5 FT jobs added for every new PT job. Even in 2004—the year with the second-highest ratio during this time-frame–there were 2 FT jobs for every PT job, yielding a ratio of 0.5.
Obamacare is accelerating a disturbing trend towards “a nation of part-timers.””
Horizontal equity is the idea that people with a similar ability to pay taxes should pay the same or similar amounts. Obamacare, however, creates essentially a tax on low-wage workers at large employers. Moreover, this tax on working at a large firm gets bigger as the ability to pay it declines. For the family of four, it does not completely disappear until workers are earning more than 350% of poverty (about $85,000). Unions are angry because union workers are more likely to work in large firms.
After news that Regal Entertainment Group had cut some workers’ hours down to 30 per week as a result of the 2010 Affordable Care Act (“Obamacare”), the public has taken to the company’s Facebook page to express its anger. Some customers simply expressed frustation with the company’s decision and vowed never to visit the movie theater again. Others highlighted the billions in profits the company enjoyed last year, as well as CEO Amy Miles’ 31 percent pay bump.
Regal Entertainment Group, which operates more than 500 theaters in 38 states, last month rolled back shifts for non-salaried workers to 30 hours per week, putting them under the threshold at which employers are required to provide health insurance. The Nashville-based company said in a letter to managers that the move was a direct result of ObamaCare
The business world is apprehensive about 2014, the year when many of the new employer health insurance rules under the Affordable Care Act – aka Obamacare – kick in. Laced within the health care law’s 2,000 pages – along with the reams of regulations that have been added since then – are various incentives and disincentives that could cause some businesses across the country to act in seemingly strange ways.
Author cites (among other things) ThinkProgress’s Rebecca Leber who says that fast food chains, among the biggest critics of Obamacare, have reassessed the positions regarding workers and insurance. New estimates from several chains — including Wendy’s, Popeye’s, Jack in the Box, and Chipotle — indicate that “Obamacare will actually cost about 80 percent less than they originally warned,” she writes. The list includes companies whose franchises have already taken preemptive action to avoid providing their employees with health coverage, including one Nebraska Wendy’s chain.
This article quotes an Associated Press release from Lincoln, Nebraska. Karen Haase, a lawyer representing about 150 school districts in Nebraska, said districts are considering cutting thousands of part-time non-teacher employees’ hours in 2014 to avoid offering them health insurance benefits mandated by the Affordable Health Care Act (Obamacare). The act requires employers with at least 50 full-time equivalent workers to cover at least 60 percent of health care costs for employees working more than 30 hours per week. Haase says thousands of non-teaching employees could be offered extended health benefits, have their hours cut or be laid off. Haase doubts many districts will offer benefits to part-time staff working more than 30 hours.
The Affordable Care Act (“Obamacare”) demands that companies with 50 or more “full-time equivalent workers” offer health plans to employees working in excess of 30 hours a week. (“Equivalent” means that, for example, two 15 hour a week workers can equal one full-time worker.) Employers with more than 50 employees (or their equivalent in hours) that don’t offer insurance face a $2,000 penalty for each uncovered worker beyond 30 employees. Therefore, by hiring a 50th worker, the firm pays a penalty on the previous 20 as well. Thousands of employers will pay a $40,000 penalty if they expand by hiring a 50th worker. The law is essentially a $2,000 tax on each additional hire after that, so to move to 60 workers costs $60,000.
The article quotes a 2011 Hudson Institute study that claims this mandate will cost the franchise industry $6.4 billion and put 3.2 million jobs “at risk.”
The huge theme-park resort Universal Orlando plans to stop offering medical insurance to part-time workers after December 31, 2013. The resort says they have been forced by new federal rules that preclude them from offering “mini-med” plans. Such plans currently provide part-time workers with a low-premium, limited insurance plan, but they have a cap on the payout of benefits.