Ongoing questions about the Patient Protection and Affordable Care Act linger, as more of the laws provisions take effect over time.
One issue for many employers concerns the treatment of temporary and seasonal workers, particularly with regards to the PPACA provision that requires employers to sponsor health coverage or pay a penalty. This applies to full-time workers, broadly defined as employees who work 30 or more hours per week. Employers with seasonal, temporary or part-time workers may have a hard time determining what that means for them, however, and these employment practices tend to be concentrated in certain industries and sectors.
Many employers in the retail and hospitality, healthcare services and government sectors reported that part-timers account for at least 10 percent of their workforce, according to a recent study by Mercer. While compliance will not be an immediate problem until 2014, employers are already considering the issue and find that they are uncertain what compliance will entail.
The Internal Revenue Service has issued some guidance, setting out safe harbors that plan sponsors can use for seasonal employees and those who work variable hours. These allow employees' hours to be assessed by looking back over an extended period, and legal experts say employers should make certain their policies are developed to match these provisions.
Employers should take care when adjusting to new rules
Mercer researchers surveyed a number of employers who do not currently offer employee benefits to those working 30 hours or more. The firm found that a slim majority of them intend to restructure their division of labor and workplace strategy so that fewer workers meet the qualifying criterion.
More than one-quarter indicated they plan to offer a low-cost health insurance plan employees newly eligible due to the hours-based requirements, and 24 percent reported they would make all employees eligible for plan offerings currently specific to full-time workers. Less than 10 percent said they intend to pay the PPACA penalties, and only 3 percent said they might cease coverage to all employees when insurance exchanges come online in 2014.
Shifting the balance between full-time and part-time workers may affect productivity and impact various other aspects of an employer's HR management system. The researchers noted that they had seen data on at least one company which lost six times as much to reduced productivity as it saved by shifting workers to part-time status.
