Health care reform will have the biggest impact on employers that don’t provide coverage to part-time employees or require them to work more than 30 hours per week for coverage eligibility. Beginning January 1, 2015, under the “shared responsibility” requirement, all employees working an average of 30 hours per week or more in a month must be eligible for affordable coverage or the employer may be subject to a penalty. This is because the new law considers employees who work 30 hours or more to be full-time employees. Traditionally, employers have defined part-time employees to mean those who work 32 hours or less. As a result, employers will want to consider revising the verbiage in their summary plan descriptions to be more in line with the new law’s definition. In addition, employers will want to monitor the hours of part-time employees more regularly to ensure they are not going over the threshold. Employers that do not offer part-time employees access to health insurance are not subject to assessments or penalties. Strategically, this may affect the way employers choose to staff their organizations. While full-time employees who go to the state health insurance exchanges to purchase coverage will trigger a penalty for a large employer, the same is not true for part-time employees who seek coverage through the exchanges. Employers will need to weigh the pros and cons of having a staff that is more heavily made up of part-time employees. Some of these considerations are not as easily identifiable as the cost of premiums. For instance, a company’s culture and an employee’s sense of investment in the company may hold hidden costs.
SHRM HR Knowledge Center
As a professional member of SHRM, you can receive free, exclusive access to the HR Knowledge Center. Our advisors have many years of HR experience and a wide variety of resources to assist you with your HR questions. You may reach the Knowledge Center at (800) 283-7476, Option #5 or by using the HR Knowledge Center Request Form.
The HR Knowledge Center has gathered resources on current topics in HR management. Click here to view and request information.