Part Time Workers May Be First Casualties of ObamaCare

As businesses work to figure out the best way to implement the new health care law into the workplace, many part time employees may lose their hours.  That's because the law requires that part time employees in some businesses who work more than 30 hours per week be entitled to health insurance from their employer.  When you have minimum wage part time workers and a business suddenly has to spend up to $10,000 per year to provide health insurance for each worker, it is the equivalent of doubling their salary.  Therefore, many employers may be forced to cut their part time workforce or reduce their hours in order to remain competitive.  Those employers that do extend health insurance to part timers will almost certainly have to pass on the cost to the consumer which will result in higher prices in an economy that is already facing increased inflation.  The retail, grocery, tourism and hospitality industries employ some of the largest numbers of part time workers. This could also have a devastating effect on the part time worker that depends on their hours to make ends meet and would otherwise not be able to afford to comply with the individual mandate.

With the individual mandate, health insurance carriers no longer have an incentive to work with businesses or consumers to lower premiums.  In fact, just the opposite is happening.  Recently, WellPoint, Inc. announced its acquisition of AmeriGroup.  More consolidation is expected and there will likely be less competition and fewer choices for businesses and consumers that may ultimately have the unintended consequence of higher premiums and reduced benefits.  However, you can't really blame the insurance providers either.  After all, legislation requires them to insure everyone regardless of health.  There are also no more lifetime caps on benefits and individuals can't be dropped from their policy when they become sick. These are welcomed changes, for sure.  As a result, insurance providers need to be able to comply with the law and remain solvent in order to provide the benefits that the law mandates.

Unfortunately, as timing would have it, our economy is teetering on the verge of a double-dip recession.  Employment numbers have been steadily declining since January 2012 and June's job numbers reported only 90,000 new jobs.  The U.S. economy needs to generate a minimum of 200,000 new jobs each and every month just to stay above water.  In 2013, businesses will have to pay a new health care tax.  This will almost certainly result in fewer employees getting raises going forward.  With less cash in their pockets to spend, our economy may begin to decline at a more rapid pace.  While we are in the early stages of implementing the new health care law, it will certainly take some time for it to be absorbed into the economy.

Many penalties face businesses under Obamacare
The hours worked by part-time employees (those working less than 30 hours per week) are included in the calculation of a large employer, on a monthly basis, by dividing their total number of monthly hours worked by 120.