Business

BUSINESS: For Employers, Obamacare Penalties Abound

By Ray Hennessey

July 29, 2013 – When is a win-win actually a lose-lose?

When it comes to the increased trend of adding part-time jobs under Obamacare.

irsThere has been a lot of chatter over how businesses will keep their staffs small or convert full-time workers to part-time status because of the penalties stemming from the Affordable Care Act.

That argument is taken from the position of the employer, usually the small-business owner who has to adjust her growth plans to not cross the 50-worker, full-time threshold that requires companies to provide qualifying health plans to its workers or face the penalties known officially as the “shared responsibility payments.” By hiring more part-timers, in theory, companies save money by paying workers less and not paying for health insurance.

That immediate benefit visited on the employer is easy to understand. But the part-time worker doesn’t necessarily suffer. It’s a more complicated argument, but the flip side is that employees may not want to work full-time hours anyway because, under the economics of Obamacare, they can bring home the same amount of money working part time as they did full time — and still get benefits.

From an employee’s perspective, full-time work traditionally is preferable for two reasons: you make more and you receive benefits. But, under Obamacare, part-time workers conceivably can have the same amount of take-home pay and health insurance to boot, according to University of Chicago economist Casey Mulligan, who wrote about the situation recently in The New York Times.

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