Because of a wrinkle in the law, companies can meet their legal obligations by offering policies that would be too expensive for many low-wage workers. For the employee, it's like a mirage -- attractive but out of reach.And the exchanges are simply too expenses.
The company can get off the hook, say corporate consultants and policy experts, but the employee could still face a federal requirement to get health insurance.
Some supporters of the law are disappointed. It smacks of today's Catch-22 insurance rules.
"Some people may not gain the benefit of affordable employer coverage," acknowledged Ron Pollack, president of Families USA, a liberal advocacy group leading efforts to get uninsured people signed up for coverage next year.The law says companies with 50 or more full-time workers are required to offer coverage that meets certain coverage standards and costs no more than 9.5 percent of an employee's income. Failure to do so means fines for the employer. (Full-time work is defined as 30 or more hours a week, on average.)
"It is an imperfection in the new law," Pollack added. "The new law is a big step in the right direction, but it is not perfect, and it will require future improvements."
But think about that for a moment, a family with an income of $21,000 a year, 9.5 percent of their income could mean premiums as high as $1,995. However a premium of $1,000 (close to the current average for employee only coverage) could be unaffordable for someone trying to live on $21,000/year.
Then there is the other issue. Many companies are reducing the the hours of these low-income people or replacing full-time with part time workers to avoid paying the higher health-care costs.
For example, WalMart Stores Inc. is lowering its portion full-time employees to part-time status (40%-20%) company critics say, which will have the effect of limiting health insurance, even though the company is expanding coverage for its part-time workers.
Indiana Schools Are Having To Cut Employee Hours.
Schools across Indiana are cutting back the hours of teacher assistants, bus drivers, cafeteria workers and other aides to avoid having to offer them health insurance under the federal health care employer mandate that begins next year.”Michigan Companies Are “Cutting Back Employee Hours.
“The debate over the Affordable Care Act — or Obamacare — it is already impacting some Michigan workers: Many part-time workers told 24 Hour News 8 their hours are getting cut to avoid qualifying for insurance. Russ’ Restaurant is among the local companies cutting back employee hours due to the Affordable Care Act, saying that non-managing employees can’t work more than 25 hours a week."In North Carolina, The Wake County Public School System Is
“Restricting Its 3,300-Plus Substitutes To Working Less Than 30 Hours A Week.” “McCoy Faulkner collects $81 a day as a substitute teacher in the Wake County (N.C.) Public School System. A mere sub, he has no benefits. … But instead of adding subs like Faulkner to its health care plan, the school system is looking for ways to avoid doing so. Wake is considering restricting its 3,300-plus substitutes to working less than 30 hours a week, effective July 1.”Companies which offered limited heath care plans for part time workers known as mini-med plans, are eliminating those plans as they don't meet the Obamacare requirements.
Darden Restaurants announced in February that its limited-coverage plans will also "go away after this year."
"We'd like to have the option to continue offering them, since they are popular with our part-time employees, but the ACA doesn't offer that type of flexibility," spokesman Rich Jeffers said. "There is still a lot we don't know about the new health-care regulations for 2014, but we are committed to helping all of our employees navigate through the new environment as we learn more."Universal Studios also.
Universal currently offers part-time workers a limited insurance plan that has low premiums but also caps the payout of benefits. For instance, Universal's plan costs about $18 a week for employee-only coverage but covers only a maximum of $5,000 a year toward hospital stays. There are similar caps for other services.
Those types of insurance plans — sometimes referred to as "mini-med" plans — will no longer be permitted under the federal Affordable Care Act. Beginning in 2014, the law will prohibit insurance plans that impose annual monetary limits on essential medical care such, as hospitalization, or on overall spending.
Ah-- the unintended consequences of a government takeover of the nation's health system (or any industry).
According to those who created the governmental monstrosity, Obamacare was meant to make heath care affordable to all Americans. But in the end what it is doing is making heath care less affordable and possibly even lowering their income as companies switch jobs from full to part time to lower the expense of heath insurance--and it is harming the people who can least afford it--low income workers.