Joan worked two part-time jobs for her local school district. As a special education teacher’s aid, she worked one-on-one with children while the special education teacher worked in larger groups. As an assistant secretary at the same school, she worked with the principal and faculty. She felt her efforts made a difference with children and families. In April the district informed her that she would be terminated from one of the jobs because she could not work more than 30 hours as of May 1. If she did, they would have to pay her medical benefits according to the Affordable Healthcare Act. They chose not to pay the benefits. She lost half her income.
Good Intentions Gone Wrong
The Affordable Healthcare Act intended to increase healthcare coverage for all Americans either through their company or individually. It provided that companies of a certain size had to provide insurance for all employees working more than 30 hours.
One provision stipulated that (as explained by Monster.com):
“Penalty for not providing insurance: Employers with over 50 employees that do not provide insurance must pay a penalty of $2,000 for every employee in the company if even one employee opts to obtain insurance through an exchange. However, the first 30 employees are not counted in calculation of the penalty. Example: an employer with 75 employees would pay the penalty for 45 workers, or $90,000 (45 x $2.000).”
The intent of the provision was to increase the number of Americans receiving insurance benefits through their employer.
Foreseen Consequences Coming True
Lobbyists for corporate America, including the US Chamber of Commerce predicted that the costs of the rule were too great. They predicted that instead of increasing people receiving insurance, companies would decrease the number of hours people worked.
We see that prediction coming true as school districts, nonprofit and for-profit organizations started reducing hours for many employees from 40 hours to 28 hours to avoid the penalties.
Friday we discuss trends in workplace and labor relations that continue to hurt Americans
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