More Companies cut part-time worker hours to avoid Obamacare requirement
Obamacare may end up hurting many of the part-time workers the President had hoped it would help.
Under the far-reaching health care law, large employers are required to offer health insurance to part-time employees working at least 30 hours a week.
But that’s not how it’s played out.
Instead of granting insurance plans to part-time employees, a growing number of larger firms are actually cutting back on workers’ hours altogether, the Los Angeles Times reported.
In the process, the employers are stripping part-time workers not only of their ability to get company health insurance but of their much needed wages as well.
The city of Long Beach, Calif., for example, is cutting the hours of many of its 1,600 part-time workers to fewer than 27 hours per week, the Times reported, in an effort to prevent them from qualifying for company-offered health insurance.
Obama's signature Affordable Care Act has had unintended consequences.
Long Beach officials have said the benefits they otherwise would have to offer could cost the municipality as much as $2 million, a price that could result in cutbacks to city services.
"We're in the same boat as many employers," Tom Modica, the city's director of government affairs, told the Times. "We need to maintain the programs and service levels we have now."
More than 2 million workers at large restaurant chains, retailers and a variety of other companies that employ more than 50 people across the U.S. are facing similar consequences.
Bill Dombrowski, who heads up the California Retailers Association told the Times that the cuts represent “the only way to survive economically” under the requirements under the Affordable Care Act.
Last week, the largest U.S. movie-theater chain cut the hours of many workers below 30 hours to bypass the law. In a memo to employees, the Regal Entertainment Group, blamed the decision explicitly on the policy often referred to as “Obamacare.”
“To comply with the Affordable Care Act, Regal had to increase our health care budget to cover those newly deemed eligible based on the law's definition of a full-time employee,” the company stated in a memo. “To manage this budget, all other employees will be scheduled in accord with business needs and in a manner that will not negatively impact our health care budget.”
Darden Restaurants Inc., which owns the Olive Garden and Red Lobster chains, made similar cuts last year, too, before the company reversed course due to intense criticism.