Public Sector Cuts Part-Time Shifts to Bypass Insurance Law
February 21, 2014
The New York Times
Cities, counties, public schools and community colleges around the country have limited or reduced the work hours of part-time employees to avoid having to provide them with health insurance under the Affordable Care Act, state and local officials say.
The cuts to public sector employment, which has failed to rebound since the recession, could serve as a powerful political weapon for Republican critics of the health care law, who claim that it is creating a drain on the economy.
President Obama has twice delayed enforcement of the health care law’s employer mandate, which would subject larger employers to tax penalties if they do not offer insurance coverage to employees who work at least 30 hours a week, on average. But many public employers have already adopted policies, laws or regulations to make sure workers stay under that threshold.
Even after the administration said this month that it would ease coverage requirements for larger employers, public employers generally said they were keeping the restrictions on work hours because their obligation to provide health insurance, starting in 2015, would be based on hours worked by employees this year. Among those whose hours have been restricted in recent months are police dispatchers, prison guards, substitute teachers, bus drivers, athletic coaches, school custodians, cafeteria workers and part-time professors.
Mark D. Benigni, the superintendent of schools in Meriden, Conn., and a board member of the American Association of School Administrators, said in an interview that the new health care law was having “unintended consequences for school systems across the nation.”
In Connecticut, as in many states, significant numbers of part-time school employees work more than 30 hours a week and do not receive health benefits. “Are we supposed to lay off full-time teachers so that we can provide insurance coverage to part-time employees?” Mr. Benigni asked. “If I had to cut five reading teachers to pay for benefits for substitute teachers, I’m not sure that would be best for our students.”
In Medina, Ohio, about 30 miles south of Cleveland, Mayor Dennis Hanwell said the city had lowered the limit for part-time employees to 29 hours a week, from 35. Workers’ wages were reduced accordingly, he said.
“Our choice was to cut the hours or give them health care, and we could not afford the latter,” Mr. Hanwell, a Republican, said. The city’s 120 part-time employees include office clerks, sanitation workers, park inspectors and police dispatchers.
Mr. Hanwell said that new rules issued by the Internal Revenue Service this month did not address the city’s fundamental concerns about the cost of providing health insurance.
Lawrence County, in western Pennsylvania, reduced the limit for part-time employees to 28 hours a week, from 32. Dan Vogler, the Republican chairman of the county Board of Commissioners, said the cuts affected prison guards and emergency service personnel at the county’s 911 call center.
In Virginia, part-time state employees are generally not allowed to work more than 29 hours a week on average over a 12-month period. Thousands of part-time state employees had been working more than that, according to the state personnel agency.
Virginia officials said they could not extend coverage to part-time wage workers because of the expense. Health benefits cost the state an average of more than $11,000 a year per employee.
For months, Obama administration officials have played down reports that employers were limiting workers’ hours. But in a report this month, the Congressional Budget Office said the Affordable Care Act could lead to a reduction in the number of hours worked, relative to what would otherwise occur.
Jason Furman, the chairman of the president’s Council of Economic Advisers, reaffirmed the White House view that the law was “good for wages and incomes and for the economy over all.”
Since Mr. Obama signed the health law in March 2010, the private sector has added more than eight million jobs. But in the public sector, the picture is different.
Government employment at the federal, state and local levels is lower today than in March 2010, by a total of 698,000 jobs, the Labor Department says. And in a recent survey, the National Association of State Budget Officers found that “states plan to reduce the number of full-time employees again” this year.
It is not entirely clear how private employers will respond, but as some government officials point out, businesses at least have the option of passing along some of the additional costs to consumers.
In Indiana, Daniel T. Tanoos, the schools superintendent for Vigo County, which includes Terre Haute, said, “The school system has no way to increase prices as a private business can.”
To hold down the work hours of school bus drivers, Vigo County has reduced field trips for children and cut back transportation to athletic events. School employees who had two part-time jobs totaling more than 30 hours a week — for example, bus driver and basketball coach — were required to give up one of the jobs.
The Obama administration says “there is absolutely no evidence” of any job loss related to the Affordable Care Act. And the Congressional Budget Office says “there is no compelling evidence that part-time employment has increased” as a result of the law.
But economists tend to focus on the private sector, which employs more people and has been adding jobs, unlike the public sector.
Republicans in Congress like Representatives Tim Griffin of Arkansas, Mike Kelly of Pennsylvania and Todd Young of Indiana said they knew of public employers in their states that had restricted the hours of part-time employees.
Authors of the health care law wanted more people to have insurance, Mr. Griffin said, but he asked: “What did they get? No insurance and less pay. Genius! That’s a genius federal program right there.”
Community colleges depend heavily on part-time faculty members, who teach about 45 percent of all courses, according to the American Association of Community Colleges. The association praised the new rules, saying they would allow many community colleges to avoid the expense of providing health benefits to part-time faculty members.
However, the denial of benefits irks some instructors.
William J. Lipkin, an adjunct professor of American history and political science at Union County College in Cranford, N.J., said: “The Affordable Care Act, rather than making health care affordable for adjunct faculty members, is making it more unaffordable. Colleges are not giving us access to health care, and our hours are being cut, which means our income is being cut. We are losing on both ends.”
The American Federation of Teachers lists on its website three dozen public colleges and universities in 15 states that it says have restricted the work assignments of adjunct or part-time faculty members to avoid the cost of providing health insurance.
The University of Akron, in Ohio, has cut back the hours of 400 part-time faculty members who were teaching more than 29 hours a week, said Eileen Korey, a spokeswoman for the school.
“We have more than 1,000 part-time faculty,” Ms. Korey said. “Four hundred would have qualified for health insurance. That would add costs that we cannot afford.”