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A March article in the New York Times profiled a San Diego based bakery company struggling to decide how to approach the full implementation of the ACA next year.
According to the article the company employs about 90 workers without health insurance, which puts them firmly over the 50 employee mark after which, a business is required to offer insurance or pay a penalty.
In the article, the rush was on for the husband and wife owners to decide if they would pay the penalty, offer insurance, or somehow get around the employer mandate.
Some of the options they were considering to get around the mandate were cutting back on workers’ hours and outsourcing jobs.
Full-Time vs Part-Time
Businesses are extra wary this year of hiring more employees, especially full time employees. This is because whether they’ll be required to offer their workers health insurance in 2014 depends on the number of employees they have this year.
Under the definitions in the ACA, a full-time employee is anyone working at least 30 hours a week. A business’ number of full time employees is determined by adding together all the hours that every employee works in a year (including part-timers) and then dividing that number by a typical 40 hour work week.
What’s important to remember with these calculations is that part-time workers will add up to full time employees. Two workers, each working 20 hours suddenly become one full time worker under the ACA.
It’s because of those definitions under the law that the ACA starts to hurt those looking for full-time employment.
For example this month Regal Cinemas announced they were cutting workers’ hours, and blamed the ACA. They claim they cannot afford to offer insurance to everyone who works 30 hours a week. Although Regal’s case might be more of an issue of politics and greed than a legitimate business concern. Regal CEO Amy Miles took home $4.6 million in 2012, and the company made well over $2 billion in 2011.
A similar situation took place with pizza chain Papa John’s during election season last year. CEO John Schnatter threatened to do what Regal is doing now. Schnatter got a lot of bad press for his controversial intentions. He had since backed down and apologized.
What it means for you
Maybe you’re not looking for work at a Regal movie theatre or a Papa John’s but you have to think that the outspokenness of these businesses could have an influence on other businesses contemplating the same issues.
Cutting worker hours or just laying people off has been a common threat from businesses unhappy with the Affordable Care Act. But it’s also a legitimate business concern if the business isn’t greedy, but simply can afford to provide insurance.
Any move like that by a business will leave job seekers out in the cold.
At the end of the Times article there was no resolution to the baking company’s dilemma, just a lot of uncertainty. I’m not sure what the business ultimately ended up doing, but you can be sure that every small to medium sized business is having a similar debate.
ABOUT THE WRITER
This article was contributed by Michael Cahill, Editor of the Vista Health Solutions blog. Michael has a degree in Journalism from SUNY New Paltz. Previously he worked as a reporter for the Poughkeepsie Journal and as an editor for the Rockland County Times.
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