Obamacare: Why cut employees if the mandate is delayed?

Runnerpat has posted some links about large corporations making changes to their health care options, but I haven’t seen any evidence that corporations of the size you’re talking about are laying off or cutting back so many people that they end up with less than 50 full time employees, which is what I was asking about.

The changes they’re making are not necessarily designed to get less than 50 full-time employees, they’re designed to keep people under 30 hours because those people don’t need health coverage under the employer mandate, regardless of how many employees you have.

So, a fictional example: BigCorp has 10,000 employees who are all working 40 hours right now. If it made no changes, it would be required to pay for health care on all of them. Instead, BigCorp changes its structure so that they now pay 16,000 people to work 25 hrs/wk. All of those people are exempt from the employer mandate.

As you can see, this is a pretty big shift in how BigCorp operates, so you can imagine that it takes quite some time for them to gear up and get ready for it.

This is one of the biggest weaknesses in Obamacare, if you ask me. It’s trying to cover low-wage families… but it’s precisely these people who can most easily be cut back to less than 30 hours a week. Under Obamacare, they still lack health insurance (unless they buy it as individuals) and now they have to work two part-time jobs to maintain their income.

In fairness it seemed like a good idea at the time; during WWII when wages were frozen and employers were desperate for another way to attract workers during the labor shortage.

Another reason is that some companies are listening to their employees. In my case, my family is much better off getting subsidized coverage on the exchange than paying a percentage of the cost in my company’s plan. So long as your company is offering “affordable insurance coverage” (which can exceed 50% of your household income in some cases), then you are not eligible for subsidized plans on the exchange.