Don’t Leave Part-Time Workers Out of the Health Care Discussion

As companies begin to navigate the complexities of the Affordable Care Act, workplace confusion and tension continues to build. Employers are unsure about how to communicate the impending health care changes to part-time workers — who are likely to be most impacted by the mandate — and employees report feeling confused and frustrated as to what the mandate will mean for them.

While most part-time workers have heard about the act, 21 percent of part-time employees out of 2,066 U.S. adults surveyed recently by The Workforce Institute at Kronos Inc. reported being unaware of how the mandate will impact them. Seven percent reported that they were unfamiliar with the mandate altogether.

When asked how they felt about the changes associated by the health care mandate, 27 percent of the survey respondents said they were “confused,” 25 percent said they were “hopeful” and 22 percent said they were “angry,” revealing a division of employee understanding.

“Their uncertainty relates very much to lack of familiarity with the details of the act,” said Tim Porter-O’Grady, a senior partner at Tim Porter-O’Grady Associates Inc., a health care consulting firm. “The survey indicates the need for policy leaders and employers to generate clear and accurate information regarding health insurance coverage and the impact of the [Affordable Care Act] on the lives of their employees.”

Starting in January 2014, the Affordable Care Act will require companies with 50 or more employees to provide low-cost health insurance coverage to full-time employees starting next year. A company is not required to cover part-time employees who work fewer than 30 hours a week, causing many companies to alter employment strategies during the current probationary period.

This has been the impetus for change as companies reliant upon low-cost labor, such as Papa John’s Pizza, McDonald’s and Jimmy John’s, are moving more employees into part-time positions to avoid the benefit requirement that will cost an employer, on average, about $9,500 a year per employee, according to a 2012 study by the Automatic Data Processing, Inc. Research Institute.

The employees surveyed by The Workforce Institute reported feeling unsure about whether the upcoming health care changes would cost them more or less money, if their work hours would be cut, or if they would even qualify for health care coverage.

For companies that primarily rely on part-time employees, particularly in the retail, food service and hospitality industries, the cloud of confusion has started to create a stressful work environment with an unclear long-term impact.

Communicate to Clarify
The problem for many companies has been a lack of communication to part-time employees about how the mandate will impact them, according to Joyce Maroney, director of The Workforce Institute. She said the lack of communication may stem from an employer’s own confusion about the mandate.

“It’s a 974-page document — few people have probably read it,” Maroney said. “There’s been a fair amount of controversy, and some organizations may have held back on their preparations.”

During the current probationary period, employees are being classified as either full time or part time by the amount of hours they are working. Employees classified as part time will be responsible for providing their own health care coverage next year — an added stress.

“I would like to think that employers would spell out options for part-time employees that don’t qualify for company care,” Maroney said. “The more that employers can filter this down to a level of understanding the better. Make it as personal as possible so [employees] can understand it.”

The best communication strategy will be informed by an employee’s needs. After deciding what information employees need to know, companies can communicate it by tacking a notice up in the break area or reaching out via social media. Businesses can also suggest outside resources such as healthcare.gov to help part-time workers navigate through the change, Maroney said.

Many companies, however, have yet to implement a transition or outreach strategy, and some have opted to ignore the mandate altogether. The penalty for failing to offer full-time employees health care benefits is a modest $2,000 per employee, which may sound like a bargain compared with the cost of providing health care coverage.

While the penalty rate is expected to rise over time, many companies are taking advantage of the seemingly inexpensive penalty next year, and some of them have yet to inform their employees of their decision, according to recent industry reports.

Companies need to develop communication strategies that will transition workers into the new health care changes, failing which workers will continue to feel confused and uneasy about the upcoming changes.

Jessica DuBois-Maahs is an editorial intern at Talent Management magazine. She can be reached at editor@talentmgt.com.