Is ObamaCare Causing Employers To Dump Health Benefits For Low-Income Workers? Here’s Your Answer:

Susan Caspersen was in a hospital in Akron, Ohio, last November recovering from an emergency appendectomy when she got some unwelcome news: as of Jan. 1, 2014, she would no longer be eligible for the health-insurance plan offered by her employer, food-service giant Sodexo USA. Ms. Caspersen, a waitress at Virtues Restaurant in the Summa Akron City Hospital, falls into part of the workforce that may feel the strongest effects of the Affordable Care Act: workers whose hours change on a weekly or seasonal basis. Thousands of these so-called variable-hour employees — many of whom work on college campuses that don’t operate during summer months — could lose their benefits as employers use new formulas to classify workers as full time or part time.

A large portion of Sodexo’s 125,000 U.S. workers are variable, and about 10,000 of them are losing access to health insurance…

(Lauren Weber, Wall Street Journal)

Comments (12)

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  1. Thomas says:

    I think this was foreseen that firms would cut hours in order to avoid the employer mandate. Many companies face additional costs due to ObamaCare, and it is likely an “either us or them” mentality.

    • Bill B. says:

      I wonder how many more employers with many variable-hour workers will respond to their additional costs from ObamaCare.

      • Buddy says:

        The headlines that Sodexo are facing should be incentive enough to avoid purging too many workers off their benefits.

        • Andrew says:

          Well theoretically, if these workers do get the boot from employer coverage, they likely make under the limit to receive subsidies from ObamaCare. Their ObamaCare plans could be more affordable. Less access to care for sure, but also possibly more affordable.

  2. Matthew says:

    “She lost her Sodexo coverage on Jan. 1, and is now paying $231 a month for a high-deductible plan offered through a government health-care exchange.”

    If she is working less than part time, how can her premium be so high? The subsidy she receives should be lowering her deductible considerably.

    • James M. says:

      Her age could play a factor, as people in their 60s can face premiums as high as $800 or $900 a month. Perhaps the subsidy has knocked down 75% of her monthly cost and she is only left with paying $231.

      • Jay says:

        ObamaCare is a very twisted game.

        • James M. says:

          She obviously makes enough to not have a subsidy cover more of the cost. Subsidies should make it to where coverage should be proportional to wages.

  3. Devon Herrick says:

    I’m a little perplexed by all the policy wonks who question whether (and why) small employers would drop coverage when their workforce is predominantly low-income? Any small employer that didn’t drop coverage would be making a decision that defies economic logic.

    There is no fine for small employers. Moreover, there are generous subsidies for low-to-moderate income workers in the exchange. It has nothing to do with whether an employer is mean-spirited, stingy, or not public-minded. It’s all about economics. There is no social convention that good employers provide coverage and bad one don’t. There is a social convention that workers are compensated in ways they prefer. If workers don’t want to pay for coverage and have access to subsidies, employers should drop coverage and boost cash wages. If, on the other hand, a firm employs more than 50 workers, and the workers are mostly high-income, it makes sense for the firm to offer coverage because workers would not qualify for subsides and most likely want coverage badly enough to forgo cash wages.

  4. Walter Q. says:

    “The company has given raises to affected workers to compensate them for the vacation and sick days they lost.”

    At least they are trying to compensate something to their employees who are affected. They aren’t as heartless as they are being made out to seem.

    • Buddy says:

      I would probably take more income over benefits regardless. Seems like a better deal, especially for variable-hour workers.

  5. Dupree says:

    This law was always corporate welfare for the largest retail companies that pay slave wages. Companies that used to provide benefits to part-timers, no longer need to because the tax payers picking up the tab. Target was a good example.