With major portions of the Patient Protection and Affordable Care Act just months away from taking effect, most large employers are not looking to circumvent coverage extension by reducing full-time workers' hours.
That's the conclusion of a just-released study by Towers Watson & Co. The firm surveyed 113 companies with more than 1,000 employees — 98 percent of whom said they are not planning to try to alter the status of full-time employers to go below the extended coverage trigger point of 30 hours a week.
Companies that don't offer health coverage to full-timers risk paying penalties of up to $2,000 per full-time worker who isn't covered. One strategy that has surfaced to defeat Obamacare's campaign to cover more workers is to reduce the hours of full-time employees below 30 hours a week. But large employers are apparently loathe to do so, the Towers Watson report revealed.
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"It's clear that most employers are hesitant to rush and implement changes that will negatively affect workers," Laura Sejen, New York-based global head of rewards for Towers Watson, said in a statement.
Wal-Mart caused a furor this week when a Reuters survey of Wal-Mart store managers indicated the company may be moving now to circumvent the extension of benefits required by the PPACA. The report said Wal-Mart is focusing on hiring temporary workers at stores across the U.S. on 180-day contracts. The temps will receive no benefits, according to the report.
But other employers are taking a different tact.
Cumberland Gulf Group, operator of convenience stores and gas stations, said it would begin to offer benefits to those working at least 32 hours a week as of Oct. 1.
Currently, only those working 40 hours a week qualify for benefits. The shift in policy would add health coverage for 1,500 workers who now receive none. The company said the move, a response to the upcoming changes under the PPACA, is designed to give it a competitive hiring advantage in advance of the implementation of the law.
Related story: Fringe Benefit takes aim at part-timers.
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Dan Cook
Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.
