Thursday, July 25, 2013

Very Few Employers Have Actually Cut Workers’ Hours Because Of Obamacare

With implementation of the Affordable Care Act inching closer by the day, there’s been a slow but steady stream of employers claiming that the law is forcing them to cut back workers’ hours and rely more heavily on part-time employees. But for all the talk, very few companies have actually cut hours because of Obamacare, according to a new analysis by the Center for Economic and Policy Research (CEPR).

Obamacare requires firms that have 50 or more employees to provide a minimum level of health coverage to their full-time workers — defined as those who work 30 hours or more per week — or pay a $2,000 per employee fine after the first 30 workers. Since the overwhelming majority of companies that size already offer health care benefits, the provision only affects about 10,000 firms. Nonetheless, reform critics have latched onto the narrative that the requirement is a job-killer, citing the example of retail and service sector companies like Regal Theaters that are cutting back hours to avoid paying for workers’ health care benefits.

The CEPR report shows that to be a minority position among larger employers. Since 30 hours per week is the threshold for employees receiving benefits under the law, researchers expected companies that didn’t want to comply with Obamacare to roll back workers’ hours to just below that threshold. But only about 0.6 percent of the labor force worked between 26 and 29 hours per week in 2013. Since 2012, the number of part-time employees working that range of hours actually stayed statistically the same. Furthermore, less than a third of workers say they are working less than 30 hours because of an employers’ decision — most choose to work the limited number of hours. That led the authors to conclude that the trend “is in the wrong direction for the ACA as job-killer story.”

“While there may certainly be instances of individual employers carrying through with threats to reduce their employees’ hours to below 30 to avoid the sanctions in the ACA, the numbers are too small to show up in the data,” the CEPR researchers write. “It appears that in setting worker hours employers are responding to business considerations in much the same way as they did before the ACA took effect.”

Researchers also contend that the Obama administration’s recent decision to delay the employer coverage requirement by a year should have little effect on the numbers, since it was only announced earlier this month.

Companies had been shifting towards part-time workers and cutting those workers’ benefits long before the health care law was around, and part-time employment has been propping up the economic recovery. But as this report shows, few firms are changing their workers’ hours in the way one would expect them to if they were really that worried about Obamacare.

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