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Obamacare: Part-Time Employees Still Count When Determining “Large” Employers

By: jayp (Diary)  |  November 23rd, 2012 at 06:15 PM  | 

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In states that setup their own exchanges, businesses with 50 or more full-time employees will be penalized financially for not complying with the insurance requirements. Obamacare defines “full-time” as anyone who works 30 or more hours per week. So, to avoid being penalized, employers will undoubtedly cut enough workers’ hours under 30 so they will not be considered full-time and therefore will be under the 50 full-time worker threshold so their business will not be subjected to the penalty.

However, it is not that simple. You see, part-time employees can count toward the 50 full-time employees limit. According to the Congressional Research Service:

“The number of full-time employees excludes those full-time seasonal employees who work for less than 120 days during the year. The hours worked by part-time employees (i.e., those working less than 30 hours per week) are included in the calculation of a large employer, on a monthly basis, by taking their total number of monthly hours worked divided by 120.”

The CRS even provides a nice example:

“For example, a firm has 35 full-time employees (30+ hours). In addition, the firm has 20 part-time employees who all work 24 hours per week (96 hours per month). These part-time employees’ hours would be treated as equivalent to 16 full-time employees, based on the following calculation:

20 employees x 96 hours / 120 = 1920 / 120 = 16″

Got that? In the example above, this firm would be considered to have more than 50 full-time employees because of the way that part-time employees are counted.

Businesses should be wary of this. Part-time workers do count when determining if an employer is considered “large.”

Funny. It’s almost as if Obamacare is designed to force people out of work. But that could never be the case.

Cross-posted a Rampart Media

COMMENTS

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  • oldtownyankee

    The more I learn about ObamaCare either by my own research or pieces like this, the more this law frightens me. Here in Massachusetts we have the heralded “RomneyCare”. Its causes the state run annually in the red by billions with no end in sight. We currently have some 6 or 7 billion in the red and growing. RomneyCare is an excellent plan until you loose your job, work in a small company, get sick or get old. You see, if you are very poor, on welfare or a newly arrived immigrant you can apply for and likely get “Mass Health” or Romneycare, then a shorty system is all free. Something is better than nothing. If your working but earn above a certain amount yet still can’t afford to buy something from this exchange that we have or perhaps want “pay as you go” like lots of self employed folks choose, then you get whacked with a $600.00 dollar tax on your state returns. Those of us lucky enough to be working and have an employer who offers health care, it’s usually whats called a “high deductible Plan” These health plans must meet the states minimum guild lines an will be called a “High Deductible Plan”. That means you get Doctors visits and some routine tests and checkups free or for a small co-pay but everything else costs you until you meet the deductible, even prescriptions. Some employers like mine set up an account managed by an IRS approved outfit that pays the deductible for you up to a certain amount then its on you. It may sound “OK” but each year it gets more and more expensive. For this very basic plan it costs me about $100.00 a week for my wife and I. That’s after my company has kicks in some $600.00 or $800.00 a month. Moreover, its harder and harder to get anything done such as an MRI or some other test, there is huge push back on that stuff now. The whole “jist” of RomneyCare seems to be to keep you from going to the doctor except for an emergency.To offset the free stuff from Mass Health, the private insurers and paying public are being squeezed more and more. I can see the quality of heath care dropping every year and the cost going up. Moreover, all the small clinics up here including private practices are either being bought out, put out of business or opting out and going into a specialty line of work like cosmetic surgery. Like I said its great until you need it.

    • commonsenseobserver

      I’m afraid Medicaid and SCHIP are here to stay, as they are.

  • oldmom2

    Yes, the part timers are included in the total to determine if a company is considered “large”, but the penalty is still only applied if one or more actual full time (30 hrs or more) employee obtains a credit for insurance subsidy. So, if a company consists of ALL part time employees- there is no penalty…from the info you posted:

    .b. For purposes of applying the penalty amounts in this table, a full-time employee is an individual working 30 hours per week or more. Part-time workers or full-time equivalents are not included.

    • http://rampartmedia.weebly.com/ jayp

      Thanks for your response oldmom2.

      I can’t help but think that the entire point of the penalties is to shift as many workers as possible to part-time status. The incentive to do so is just too high. Your first point highlights this well. If there is no full-time worker then there is no chance of a penalty being assessed. I think that this will definitely play into employer’s decisions on hiring and the consequences won’t be pretty.

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