Governments’ part-timers lose hours as Obamacare looms

Reid Wilson / The Washington Post /

Part-time government work is becoming even more so under the health-care law championed by President Barack Obama.

Many cash-strapped cities and counties, facing the prospect of shelling out hundreds of thousands of dollars in new health-care costs under the Affordable Care Act, are opting instead to reduce the number of hours their part-time employees work.

Cutting the number of hours part-time employees are permitted to work will save some county and local governments from having to provide health-care coverage for employees. The Affordable Care Act requires employers to cover employees who work at least 30 hours a week or to pay a penalty.

Critics of the law have pointed to Bureau of Labor Statistics reports that show many of the new jobs the economy is adding are part-time positions. And many private-sector companies are cutting hours or health benefits, citing new costs associated with the Affordable Care Act. On Tuesday, United Parcel Service said that, beginning in 2014, it would exclude working spouses currently covered from the company’s health-care plan if those spouses are eligible for coverage through their own companies.

Even 3½ years after Obama signed the measure, both private- and public-sector employers say uncertainty over the law’s implications are driving their caution, which means shifting full-time jobs to part-time status.

The decisions to cut employee hours come 16 months before employers — including state and local governments — will be required to offer health-care coverage to employees who work at least 30 hours a week. Some local officials said the cuts are happening now either because of labor contracts that must be negotiated in advance or because the local governments worry that employees who work at least 30 hours in the months leading up to the January 2015 implementation date would need to be included in their health-care plans.

On Tuesday, Middletown Township in New Jersey said it would reduce the hours of 25 part-time workers to avoid up to $775,000 in increased annual health-care costs. Earlier this month, Bee County in Texas said it would limit its part-time workers to 24 hours per week when the new fiscal year starts Oct. 1.

Last month, department heads in Florida’s Brevard County were told to plan similar cuts in advance of the 2015 deadline. Brevard County Insurance Director Jerry Visco estimated the new mandate would cost the county $10,000 per part-time employee — or $1.38 million a year if all 138 part-time employees who work more than 30 hours a week are covered, he told Florida Today. The county’s libraries have already cut hours for 37 employees.

“It’s not something we prefer to do, but the cost of health insurance is significant and would really impact municipal budgets,” said Anthony Mercantante, Middletown’s township administrator. “It’s not something we can take on, particularly when we don’t know some of the other ramifications of the Affordable Care Act. There are far more questions than answers right now.”

The township spends about $9 million a year, out of its $65 million budget, on employee health policies, Mercantante said.

Chippewa County, Wis., will drop 15 part-time positions to avoid as much as $163,000 in annual health-care costs, the county administrator told Wisconsin Public Radio in April.

The White House is discounting the idea that the act is costing people work and money.

In a statement provided to The Washington Post, Jason Furman, chairman of the Council of Economic Advisers, said there is no evidence that the Affordable Care Act is giving employers an incentive to add part-time rather than full-time positions.

“Since the ACA became law, nearly 90 percent of the gain in employment has been in full-time positions. Furthermore, the law is helping make health-insurance coverage more affordable which supports job growth,” Furman said. “Just yesterday, we learned that the growth in employers’ health-care premiums has slowed significantly recently, to less than a third of the growth rate in the late ’90s and early 2000s.”