HuffPost’s Business by Jeffrey Young –
February 4, 2013:
Just 8 percent of part-time workers are enrolled in their company health insurance plans, according to a report released Monday that underscores the reasons for and the challenges created by President Barack Obama’s health care reform law.
Low-income workers are the primary target of Obamacare’s expansion of health insurance to as many as 30 million people through Medicaid, subsidized private plans and new job-based health coverage. But the law’s requirements for employers are leading some to consider cutting part-time workers’ hours, raising questions about whether these workers will be better or worse off.
The report, conducted by the payroll and benefits manager Automatic Data Processing’s ADP Research Institute, partly illustrates why 47 million Americans have no health insurance.
The ADP Research Institute analyzed data from about 300 large employers covering 2 million workers and dependents. Among the employers studied, 23 percent of their workers are part-time but only 8 percent get company-sponsored health benefits. Just 15 percent of part-time workers are even offered health insurance.
Cost is the main reason part-time workers don’t enroll in company health plans when they’re available, especially among those who earn less than $30,000 a year, said Tim Clifford, the president of ADP Benefit Services. That group is due to receive the largest financial assistance under health care reform.
“Part-time coverage has always been pretty low,” Clifford said. “There’s no question that the law will extend coverage to millions of Americans,” he said. But it also will create some disruption within the realm of employer-sponsored health benefits as companies decide whether to open their insurance plans to more workers or devise strategies to avoid Obamacare’s new rules and costs, he said.
Seventy-seven percent of workers at the companies studied in the report are full-time. Among those full-time employees, 88 percent were eligible for health benefits, and 77 percent of those who were offered health insurance signed up.
Jobs are the most common source of health insurance coverage in America, with more than 150 million workers and dependents getting coverage from their employers. Although higher-income and full-time employees aren’t likely to see major changes when the biggest parts of the health care reform law take effect next year, the impact on lower-income people could be mixed.
The law’s individual mandate will require nearly all legal U.S. residents to obtain health insurance whether they want it or not, with certain exceptions. And while lower-income workers should have access to more affordable health care coverage, employer response to the law could reduce the hours they work.
The core goal of the health care reform law is to extend health insurance coverage to those who currently go without, a large proportion of whom are workers who can’t afford it, said Ethan Rome, the executive director of Health Care for America Now, an advocacy organization that campaigned for the law.
“From the perspective of the employee, the question is: are folks going to get affordable coverage? And the answer is yes,” Rome said. “They’re going to get offered health insurance when they otherwise wouldn’t get it,” whether it’s from their employers or via new benefits created by the health care law, he said.
Obamacare will provide Medicaid coverage to anyone who earns up to 133 percent of the federal poverty level, which is $15,282 for a single person this year, if the individual lives in a state that opts into an expansion of the program. People who earn between the poverty level, $11,490 for an individual in 2013, and four times that amount will be eligible for tax credits to defray the cost of private insurance if their employers don’t provide health benefits.
There may be trade-offs, however. Employers that can’t or don’t want to add low-wage and part-time workers to their employee health plans are considering their options.
Companies don’t always offer fringe benefits to low-wage workers, especially part-timers, because doing so traditionally hasn’t been considered necessary for hiring and retention, Clifford said. By contrast, higher-skilled, higher-paid workers expect their employers to provide health insurance as part of their compensation.
Under the health care reform, law, however, employers with at least 50 full-time workers must offer health insurance coverage to employees or face penalties that start at $2,000 per uncovered worker.
One way to avoid the law’s requirements is to reduce employees’ hours to below the 30-hour threshold that marks them as full-time. Retail and food-service firms like Darden Restaurants, which owns the Olive Garden and other chains, have publicly weighed this approach, as have some universities and other employers.