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.
“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.