Tara Sievers, shown with her son, Bodhi, 7, is unhappy that her employer, the city of Long Beach, Calif., is cutting hours for some part-timers to avoid benefit costs: “It’s ridiculous the city is skirting the law.”
ROBERT GAUTHIER • Los Angeles Times ,
Many part-timers to lose pay amid health act's new math
- Article by: Chad Terhune
- Los Angeles Times
- May 7, 2013 - 7:56 PM
Many part-timers are facing a double whammy from President Obama’s Affordable Care Act.
The law requires large employers offering health insurance to include part-time employees working 30 hours a week or more. But rather than provide health care to more workers, a growing number of employers are cutting back employee hours instead.
The result: Not only will these workers earn less money, but they’ll also miss out on health insurance at work.
Consider the city of Long Beach, Calif. It is limiting most of its 1,600 part-time employees to fewer than 27 hours a week, on average. City officials say that without cutting payroll hours, new health benefits would cost up to $2 million more next year, and that extra expense would trigger layoffs and cutbacks in city services.
Part-timer Tara Sievers, 43, understands why, but she still thinks it’s wrong.
“I understand there are costs to health care reform, but it is surely not the intent of the law for employees to lose hours,” said the outreach coordinator at the El Dorado Nature Center in Long Beach. “It’s ridiculous the city is skirting the law.”
Across the nation, hundreds of thousands of other hourly workers may also see smaller paychecks in the coming year because of this response to the federal health care law. The law exempts businesses with fewer than 50 full-time workers.
But big restaurant chains, retailers and movie theaters are starting to trim employee hours. Even colleges are reducing courses for part-time professors to keep their hours down and avoid paying for their health premiums.
Overall, an estimated 2.3 million workers nationwide are at risk of losing hours as employers adjust to the new math of workplace benefits, according to research by the University of California, Berkeley.
One consolation for part-timers is that many of them stand to benefit the most from the health care law’s federal premium subsidies or an expansion of Medicaid, both starting in January.
The law will require most Americans to buy health insurance or pay a penalty. Yet many lower-income people will qualify for government insurance or be eligible for discounted premiums on private policies.
“For people losing a few hours each week, that’s lost income, and it has a real impact,” said Ken Jacobs, chairman of the UC-Berkeley Center for Labor Research and Education. “But many low-wage, part-time workers will also have some affordable options under the federal law.”
Employers say these cutbacks are necessary given the high cost of providing benefits. Bill Dombrowski, chief executive of the California Retailers Association, said employers are reducing hours because “it’s the only way to survive economically.”
Long Beach officials said they studied the various budget options and opted for a plan that should affect only a small portion of its workforce. The city estimates about 200 part-time workers will be among the most affected by a reduction in hours, representing about 13 percent of its overall part-time staff.
© 2013 Star Tribune