Affordable Care Act
6:17 am
Fri February 7, 2014

Local Employers Face Uncertainty With Health Care Law


This week the non-partisan Congressional Budget Office (CBO) released a report on the effect of the Affordable Care Act on jobs. Among other things, the report says low- and middle-income workers may have less incentive to work more hours if it means losing health care subsidies.

But Miami Valley employers have other concerns: Beginning in 2015, the health care law will require companies with at least 50 full-time employees to give health care to anyone working at least 30 hours, or pay a fine.

To avoid those fines, Sugarcreek Township is among those limiting all its part-time workers’ hours. In Sugarcreek, most of the part-timers are fire fighters, and the township has been experimenting with how to maintain necessary staffing levels while also avoiding accidentally facing fines.

“If there’s a fire going on, you don’t want anybody walking away, ‘you know, sorry my time’s up I hit 24 hours, I’m going home’”, said Sugarcreek Township Trustee Scott Bryant.

Bryant and many others say the largest concern from an employer perspective continues to be uncertainty.

“It’s difficult for small businesses as well as local governments to really understand what the impact’s going to be to the part-time labor force,” he said.

Other local employers that have said they’ll limit employees hours due to health costs include Sinclair Community College, White Castle and the government of Tipp City.

But will Obamacare mean that the economy is increasingly reliant on part-time work? The CBO actually says there’s not strong evidence that the law itself is the cause of part-time employment.

The researchers say it will take a few years for the law’s effect on jobs to become clear, although the congressional report does say the Affordable Care Act is likely to remove the equivalent of 2.5 million jobs from the workforce by 2024. That doesn’t actually translate to 2.5 million people leaving the workforce—more likely, it means many more people than that, reducing their hours somewhat.

The logic behind that reduction is a matter of labor supply, rather than labor demand: for people in low- and middle-wage jobs, working more hours could mean getting less in health care subsidies, which reduces the incentive to supply more work in the labor market.