Community College Of Allegheny County will cut the hours some instructors to avoid paying for their health insurance coverage under new Affordable Care Act rules.It's not just restaurants cutting the hours of employees so they can classify them as part time workers and avoid the requirement in the Affordable Care Act that full time employees have ACA compliant health insurance.
CCAC President Alex Johnson announced in an email to employees last week that the school would cut course loads and hours for some 200 adjunct faculty members and 200 additional employees.
While Papa John's and some Denny's franchisees have brought this issue to the publics attention to make a political statement, I don't see a political aspect to Community College Of Allegheny County's decision to reduce hours to avoid the employer mandate. CCAC is doing this because they don't have the money from tuition or the state to pay for this.
For employees who already have health insurance that largely conforms to ACA, their employers are unlikely to try to convert their employees to part time unless the business turns for the worse.
Looking at this situation as an economist, those who work more than 30 hours a week and don't have health insurance are those most vulnerable to having their hours reduced.
The ACA is a very large and complex law that will have thousands of pages of regulations going with it. As it gets implemented many problems will be exposed, this is just the nature of complexity. Supporters of ACA need to accept there will be problems, they should not vilify those who raise these problems and respond that the direction of the law is good and the law needs to be updated to address the problems that come up.
When it could cost $100/week for insurance, the difference between a 30 hour week and a 35 hour week is an additional $20/hr for health insurance for these additional 5 hours. There is just too much economic pressure on employers that do not pay for health insurance to reduce employee hours to expect many of them not to reduce hours. Praise should be given that provide insurance rather than cut hours.
The answer to Papa Johns, CCAC and others reducing employee hours to avoid health insurance costs is to reform ACA, so there is a required per hour payment to a government fund that will then be used to pay for the part time worker's health insurance through the exchanges.
Providing exceptions to the law based on hours worked and number of employees was a mistake that needs to be corrected. Yes, this problem would not exist under single payer. This issue could provide an additional reason for forming a union.
In the months ahead we should review the monthly unemployment report from BLS to see if the employed are increasingly part time workers. If this does happen we might see a decrease in the U6 unemployment rate as 3 full time people may be replaced by 4 part time.