Small Businesses Can Not Use "Part-Time Employee" Loophole

[CHUMPS FROM OXFORD]

Small Businesses Can Not...Oh. Wait! Nothing New Here! Never Mind!

OUCH!!!


Sorry: Businesses cannot avoid Obamacare by switching to part-time staff | WashingtonExaminer.com

 

[Ann H]

The writer of this article doesn't understand the issues. He is talking about the counting phase, and it has always been this way, where you count part-time employees as a pro-rata share of a full time employee (full-time equivalent).

But nonetheless, moving employees to part-time helps in the penalty phase, because both employer penalties are only assessed on full-time employees, not part-timers.

 

[Crabcake Johnny]

I have to go from memory Ann - you'll know this - but something in this legislation that if "X" percentage of workers has to get a subsidy then the business incurs a penalty.

 

[leevena]

I agree with Ann, nothing new here. A strategy that some of these groups will use is to move as many people as possible below the 30 hours level. Let's use as an example a 15 restaurant chain that a franchisee owns. They want to cover the 20 home office (management, marketing, HR, etc.) and 3 managers per location. The other 400 employees are traditional hourly/part-timers at the 15 stores. No doubt that the group will reach 50 for the determination of large or small. But if the group offers coverage to 30 hours+, that meets benefits/affordability, they have no responsibility to offer to the under-30 hours.

 

[Crabcake Johnny]

There are also real world consequences for businesses that try to pull this stunt.

If you remember, Darden's emotional reaction was "we're gonna throw employees to part-time."

That didn't last long: Darden Restaurants Profit Plunges 37 Percent After Bad Publicity Over Attempt To Skirt Obamacare following swiftly by this: Darden Kills Plans To Cut Full-Time Workers To Part-Time, Despite Complaining About Obamacare - Business Insider

"Internal surveys showed that both employee and customer satisfaction declined at the restaurants that were being tested, the AP reported. Darden said that its restaurants perform better when full-timers are involved."

​

 

[deadhead]

There are also real world consequences for businesses that try to pull this stunt.

If you remember, Darden's emotional reaction was "we're gonna throw employees to part-time."

That didn't last long: Darden Restaurants Profit Plunges 37 Percent After Bad Publicity Over Attempt To Skirt Obamacare following swiftly by this: Darden Kills Plans To Cut Full-Time Workers To Part-Time, Despite Complaining About Obamacare - Business Insider

"Internal surveys showed that both employee and customer satisfaction declined at the restaurants that were being tested, the AP reported. Darden said that its restaurants perform better when full-timers are involved."

​

That's sad. The fact that they had the balls to say "up your odumbass" caused me to support them. Oh well......

 

[Ann H]

I have to go from memory Ann - you'll know this - but something in this legislation that if "X" percentage of workers has to get a subsidy then the business incurs a penalty.

There are 2 penalties. The first is for a large group that does not offer health insurance to at least 95% of the company's full-time employees. That penalty is $2,000 per full-time employee less the first 30. The penalty is triggered when at least 1 employee receives a subsidy for purchasing their insurance on the exchange, but the penalty is assessed across the board of all full-time employees less the first 30.

The second penalty is for large groups that offers health insurance, but it does not meet the standard of adequate (minimum value) and/or affordable. That penalty is $3,000, but it is only assessed on the full-time employees that actually receive a subsidy for purchasing their insurance on the exchange, rather than across the board as in the 1st penalty. This penalty cannot be greater than the 1st penalty would have been.

Neither of these penalties apply to employees working less than 30 hours per week, and the health insurance does not need to be offered to part-time employees working less than 30 hours per week.

As for Darden, and that one Applebees franchise, and the pizza joint, this was bad PR. But when the implementation comes, labor-intensive industries like restaurants, hotels/motels, daycares, landscapers, etc. will cut their workforce hours anyway. The cost of healthcare or the penalties is greater than the profit margin for most of those industries. And, really, it is in the best interest of the employees anyway. These are low-income employees who are better off with rich subsidies in the exchange than "affordable" employer insurance. Remember the family glitch, where "affordable" is based on the self-only premium without regard to how much it costs to add dependents? And, as for affordability, it is better to pay the member's share on subsidized insurance than the "affordability" rate of 9.5% on employer-sponsored insurance. The member's share is much less than 9.5% for incomes of less than 300% of FPL. And, at 250% of FPL or less, the employee gets CSR (cost sharing reduction) subsidies, too, which lowers their copays, deductibles and out-of-pocket maximums. So... when/if the employer penalties are revived in 2015, I expect those labor-intensive industries to move their employees to part-time anyway.

 

[AllenChicago]

Today the White House launched a "Web Wizard" to answer a lot of the questions that business owners have related to coverage requirements and subsidies. It will grow in content as time passes.

Story: White House Launches Health Care 'Web Wizard' | www.statesman.com

Link to the Wizard: Health Care Changes Wizard | BusinessUSA

ac

 

[Ann H]

Hypocritical. The govt is so worried about agent/brokers "steering" clients to certain plans and not telling them about other plans that are available. But that website STEERS them to the govt SHOP and doesn't tell them about the robust private market where many other plans are available for clients to purchase.

 

[xrac]

Hypocritical. The govt is so worried about agent/brokers "steering" clients to certain plans and not telling them about other plans that are available. But that website STEERS them to the govt SHOP and doesn't tell them about the robust private market where many other plans are available for clients to purchase.

The government is for the government and not for the people.