Heath Reform Update: New Law Could Strip Employee Benefits Eligibility

Threat to the ACA Could Take Away Employee Benefits for Millions of Americans

Health Care Law
© Jiri Hera - Fotolia.com

While most people have been celebrating the improved US economy and planning their careers and lifestyles around this factor, a “silent” law has been passed by the Republican majority that could affect nearly 1 million American workers and their families for years to come. This attack on health care reform and the Affordable Care Act essentially strips health care coverage from workers who are currently covered under ACA minimum hour guidelines.

The Congressional Budget Office advises it could add some $53 billion more dollars to the federal deficit in just the next decade. 

How the Law Impacts Worker Eligibility for Employee Benefits

Republican bill (H.R. 30) was passed by two-thirds of the House in January of 2015, and it changes the way employee benefits are offered to working people. As part of ACA rules, large employers are now required to provide access to affordable health insurance to employees who work at least 30 or more hours per week. H.R. 30 changes this in that employees now must work at least 40 hours per week in order to qualify for group health insurance.  

Will Employers Reduce Work Hours to Avoid ACA Penalties?

This law encourages employers to drop their employees’ work hours to 39 hours per week in order to avoid paying for insurance (without penalty), basically negating the efforts of the ACA to ensure all Americans have health insurance.

 According to a study conducted by UC Berkeley Labor Center, this puts working people at risk of losing their health insurance coverage if their employer chooses to reduce their hours. The study advised that,” that 6.5 million Americans are in firms of 100 workers or more, work 40 hours or more a week, have incomes under 400 percent of the federal poverty level, and do not have job-based coverage through their employer and so would be vulnerable to reduced work hours...This represents 5.6 percent of the United States workforce.” This will have a huge impact on the American public, many of whom are either earning too much to qualify for Medicaid or are nearing retirement age and working well into their 60s and 70s to make ends meet.

Since the inception of ACA, already some employers have either chosen to replace their full time staffers with part time employees, or they have reduced hours to avoid ACA tax penalties. This defeats the entire purpose of the ACA law in the first place. While there is legislative action in progress to stop this practice, called the Forty Hours is Full Time Act, it’s too late for many employees who have already had their hours cut and lost eligibility for coverage.

A Final Thought on Where Employee Benefits Stand in America

The ACA has had a positive impact on the employee benefits market. According to the Gallop – Healthways Well-Being Index, some 10 million Americans now have health insurance and the rates of uninsured people have dropped from 17.1 percent at the end of 2013 to 12.9 percent in 2014, just a year after full ACA requirements were carried out. It seems that the US workforce wants to comply, but there are too many employers who are using unethical methods to stay under the radar when it comes to providing their employees with the required minimum benefits.

It’s up to all American workers to stand up to their employers if they believe they are being targeted for work hour reduction to avoid offering health care benefits, by understanding employee rights that can be found at the US Department of Health and Human Services and Healthcare.gov.

Image Credit: © Jiri Hera - Fotolia.com