July 24, 2013

Some lose hours, get no insurance under health law

To avoid paying for coverage, employers push workers just below the 'full-time' threshold.

By SANDHYA SOMASHEKHAR The Washington Post

WASHINGTON – For Kevin Pace, the president's health care law could have meant better health insurance. Instead, it produced a pay cut.

Like many of his colleagues, the adjunct music professor at Northern Virginia Community College had a hefty course load, despite his official status as a part-time employee. But his employer, the state, slashed his hours this spring to avoid a Jan. 1 requirement that all full-time workers be offered health insurance. The law defines "full time" as 30 hours a week or more.

"We work so hard for so little pay," Pace said. "You would think they would want to make an investment in society, pay the teachers back and give us health care."

Earlier this month, the Obama administration delayed the employer insurance requirement until January 2015. But the state of Virginia, like some other employers around the country that capped part-timers' hours in anticipation of the initial deadline, has no plans to abandon its new 29-hour-a-week limit.

The impact on Pace and thousands of other workers in Virginia is an unintended consequence of the health law, which, as the most sweeping social program in decades, is beginning to reshape aspects of American life.

Under the law, companies with 50 or more workers will be required to provide health insurance to all their full-time employees, or face significant fines.

The decision to delay that requirement was welcomed by business groups, which said companies needed more time to adapt to the law. But the delay has emboldened the law's critics, who say it is evidence the statute is ill-conceived and should be repealed.

A new Washington Post-ABC News poll finds that the country, which remains deeply divided about the law, is similarly split about the delay in the employer requirement. Fifty-one percent say they support the delay, while 45 percent say they do not. The public is also divided over whether the setback means the law is fatally flawed.

The poll, taken at a time of heightened criticism of the law, also finds support has weakened among Democrats since last year. Just under six in 10 Democrats say they support the law, the lowest point for Post-ABC surveys since the law was passed in 2010.

When the law was written, advocates hoped the employer requirement would help reduce the ranks of the uninsured. Some employers have indeed said they would offer insurance to additional workers, but others have gone in the opposite direction.

Virginia's situation provides a good lens on why. The state has more than 37,000 part-time, hourly wage employees, with as many as 10,000 working more than 30 hours a week. Offering coverage to those workers, who include nurses, park rangers and adjunct professors, would have been prohibitively expensive, state officials said, costing as much as $110 million.

"It was all about the money," said Sara Redding Wilson, director of Virginia's Department of Human Resources Management. "If we could cover everyone, we would."

It is unclear how many companies have already cut staffing hours this year in anticipation of the law. Mercer, a human relations consulting firm that regularly queries public and private entities, found that 12 percent of employers in a survey last year planned to cut staff hours to avoid a jump in costs under the new rules.

However, the numbers are higher for the retail and hospitality industries, as well as for government, because those employers often rely on a large number of part-timers but do not already offer them benefits, the firm said.

Obama administration officials say there is no evidence that large numbers of businesses are cutting their workers' hours this year. Rather, they say, Bureau of Labor Statistics numbers suggest full-time hiring has grown despite the employer mandate.

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