Jay Carney, President Obama’s press secretary, yesterday dismissed as unfounded reports that businesses are turning to part-time employees instead of full-time employees as a way to circumvent the requirements of Obamacare that are set to take effect Jan. 1.
White House press secretary Jay Carney on Tuesday dismissed reports that some employers were hiring more part-time employees because of the president’s signature healthcare law.
“The data reflects that there is not support for the proposition that businesses are not hiring full-time employees because of the Affordable Care Act,” Carney told reporters.
All you can do when you read statements like Carney’s is laugh. Does the administration really believe that the American public is naive enough to disregard what they’re seeing with their own eyes and hearing with their own ears? The Wall Street Journal’s report on the subject is in black and white for anyone who wants to read it. Numbers don’t lie. They can be manipulated, but in this case it seems apparent that businesses are either firing workers or cutting their hours as a loophole in the Affordable Health Care Act.
We’re seeing it right here in our small communities. Just today I put the wraps on a story (and related editorial) about how the Oneida Special School District is reclassifying its non-certified personnel, limiting them to an average of 29 hours per week. And while the Scott County School System has not yet taken such drastic steps, they have for months been hiring new non-certified personnel as part-time rather than full-time workers in preparation for the Jan. 1, 2014, implementation of Obamacare.
In the Oneida system, where there are 75 non-certified personnel, 65 of those employees are being reduced from 40 hours per week to 29 hours per week. (Obamacare requires that employers with more than 50 employees offer insurance for every employee who works more than 30 hours per week.) The only positions not impacted are those dealing with student records and other sensitive data, school nurses, and other employees who are needed at all times.
Oneida administrators took steps to alleviate any negative impacts on their employees by reclassifying them as 29-hour full-time employees rather than part-time employees. That distinction, being approved by the school system’s board of education, allows employees to retain their retirement, dental insurance and other benefits. The school system is also freezing their pay, so that their take-home pay will not change. In essence, they will be making more money per hour.
However, 25 of the 65 employees in question already had health insurance benefits through the school system. They will lose that coverage, effective Dec. 31.
The problem is multi-faceted for school system accountants, as many small businesses across the country are discovering with the excessive regulations that the new health care law brings.
Besides the raw cost of providing health care coverage to all employees (more on that in a moment), there is the so-called affordability threshold, which says that employees cannot be made to pay more than 9.5 percent of their gross family income on health care coverage. (The law also requires that employers pay at least 60% of the premiums; the Oneida school system currently pays 75% of their employees’ premiums, which is more or less standard in the business industry.)
Given the affordability threshold, if an unmarried food service employee makes $15,000 per year — I’m rounding, but that’s a ballpark figure — they could only be made to pay $1,425 in insurance premiums. The typical policy for the school system is $15,000, of which the system pays $12,000. Under the new law, if they were paying for the non-certified employee’s policy, they would have to foot the bill for more than $13,500 of that policy.
By reducing their employees to 29 hours per week, the school system can get around offering health care coverage for every employee, while the employee will be eligible to purchase insurance plans on the open market through exchanges set up by the federal government . . . and, presumably, they will have to pay no more than they would have paid had the school system offered them insurance, with the federal government footing the rest of the bill.
There is little doubt that Obamacare will help Americans who could not afford insurance in the past obtain insurance going forward. To that end, it is a good thing. America is the world’s most prosperous country, and there is no reason we should have people who need health care coverage but cannot obtain it. We don’t have a constitutional right to health care coverage, but one can easily make the argument that in a nation as rich as hours (comparatively speaking, at least), we have a moral obligation to make sure all our citizens have access to it. That is the very root of health care reform. It is a concept the Republicans ignored for years while they had control of Washington, which is exactly why we wound up with this bureaucratic nightmare known as Obamacare once the Democrats seized control and landed the opportunity to accomplish what had been a lofty goal of the party for many years.
But at what cost will Obamacare extend this insurance coverage, given its sundry requirements? A great cost to workers, because small businesses — which employ millions of workers and drive the American economy — simply cannot afford it. That’s why we’re already seeing scores of employers doing exactly what the Oneida Special School District chose to do, regardless of what Jay Carney tries to pass off on us.
The Oneida employees are lucky. They get to keep their same pay, they get to keep most of their same benefits. Many, many other employees across America aren’t going to be as lucky. A public school system can afford to alter employees’ pay rates (by giving them the same pay for 29 hours as they would have given for 30+ hours) because their success is not tied to a bottom line. For-profit businesses, however, operate on a much different model. They aren’t likely to allow employees who are having their hours cut to keep their same pay. And for hundreds of thousands, if not millions, of workers, the implementation of Obamacare is going to take a chunk out of their family’s bank account as a result.
As one school system administrator put it, “Obamacare is good for people who couldn’t obtain insurance up until now, but for the average, every-day working man, it’s going to be a detriment.”
We will continue to see the effects of this as Jan. 1 draws nearer . . . including at other public school systems in the region. In Morgan County, for example, the county commission has agreed to foot part of the bill for increased insurance costs of the school system. But as an increasing number of school employees indicate an intention to take those employer-provided policies, the county commission is already worrying that it might not be able to afford the cost increase. The Scott County School System, too, is likely to make more changes moving forward. For now, they have resorted to such measures as taking efforts to reduce utility bills and eliminate a few non-essential positions. But we may very well see the county cut all non-certified employees to part time before all is said and done, as well.