4 Companies Screwing Their Workers Out of Health Insurance as Health Care Exchanges Open
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October 1st marks the first day that health care exchanges under the Affordable Care Act open. But it also marks a time of worry for low-wage workers across the country. Companies with more than 50 employees are slashing worker hours to avoid the mandate under the law requiring them to provide healthcare to full-time workers, according to a report in The Guardian. Corporations are making the moves now even though the Obama administration announced that the employer mandate rule will be delayed until next year.
Under Obamacare, big companies must provide health insurance to people working more than 30 hours a week. So instead of offering full-time workers health care, they are shifting some of those workers to part-time work--and avoiding the health insurance mandate.
The moves are causing low-wage workers to worry about health care. They fear they could be hit by a double whammy: losing full-time work and losing health care. They would be forced to pay out of pocket for healthcare that they could get through the marketplace exchanges the law has set up. But it could be prohibitively expensive for some.
Here are 4 companies making move to slash hours in the wake of Obamacare.
1. Forever 21
The major clothing company, which employs 30,000 people, told some workers in a memo last month that it needed to cut workers’ hours and re-classify some as part-time employees. ‘
The memo said that some employees’ hours will be reduced to 29.5 a week--just under the 30-hour full-time category. The company denied the move had anything to do with the health care law. But it will nonetheless allow Forever 21 to avoid giving health insurance to part-time employees.
Earlier this month, the Orlanda, Florida-based theme park announcedthat it too will cut back some workers’ hours. The company confirmed the move to the Orlando Sentinel, which reported that “ SeaWorld will schedule part-time workers for no more than 28 hours a week, down from a previous limit of 32 hours a week.”
SeaWorld did not comment to the Sentinel on the question of whether the move had anything to do with Obamacare. But the slashing of worker hours means the company can avoid giving health insurance to workers who put in time for less than 30 hours a week.
“There is no other reason to change your cap from 32 hours to 28 other than” the health care law, Duncan Dickson, a professor at University of Central Florida's Rosen College of Hospitality Management, told the newspaper.
3. Trader Joe’s
This company has long provided even part-time workers with health insurance. But no longer. In a memo to workers last month, Trader Joe’s said that as of next year, part-time employees would no longer get health insurance.
The company encouraged workers to sign up for the new healthcare exchanges. Part-time workers will be given a check for $500 to help them with health insurance, though that’s hardly enough money.
The wife of a Trader Joe’s employee told The Guardian her husband may not buy health care because of the cost. “My husband is debating getting insurance which scares me as the job is physical so there is always a risk of on site injuries that require medical attention. We are expecting to pay more out of pocket. We are working on putting aside some now so we can afford coverage next year,” she told the Guardian. “I am worried there will be months when we will have to choose paying health insurance or paying a bill. Neither is a good option with two children to think of."