Employees at Staples will soon get a little bit more vacation — thanks to Obamacare. Unfortunately, that time off will be unpaid — and in most cases, unwelcome.
The retailer, which employs 85,000 people, has limited part-time work to 25 hours a week to avoid Obamacare’s fines for not providing insurance to those who work 30 or more hours a week.
President Obama refused to acknowledge that his healthcare law played a part in Staples’ decision. “I haven’t looked at Staples stock lately or what the compensation of the CEO is, but I suspect that they could well afford to treat their workers favorably,” he said of the company during a recent interview. “Shame on them.”
But if Obamacare had never become law, scores of working-class Americans would be logging more hours and making more money. The president’s health law has effectively taken money out of their pockets.
The main culprit is Obamacare’s employer mandate. This year, companies with 100 or more employees must provide all who put in 30 or more hours a week “affordable” insurance that meets Obamacare’s generous coverage standards. Next year, the rule will apply to companies with 50 or more workers.
The law defines coverage as affordable if it consumes less than 9.5 percent of an employee’s income.
Companies that refuse to comply are subject to fines equal to the lesser of $2,000 per worker, with the first 30 exempted from the calculation, or $3,000 per employee who goes on to secure subsidized coverage in Obamacare’s individual insurance exchanges.
The average cost of individual employer-sponsored health insurance exceeded $6,000 last year. The fines for failing to provide it can amount to tens or hundreds of thousands of dollars.
It’s no wonder that companies are trying to dodge these expenses by making full-time employees part-timers. Workers ultimately pay the price, as they notch fewer hours and take home smaller paychecks.
Staples isn’t the only employer to cut hours. Investor’s Business Daily has tallied more than 450 private companies and government agencies that have done the same.
Betsy Webb, a school superintendent in Maine, recently testified before the Senate Committee on Health, Education, Labor and Pensions that her school system will have to cut substitute teachers’ hours, as it can’t afford to provide them health insurance. The school will also have to require those working two part-time jobs for the district to quit one of them.
As she told the senators, everyone loses.
Other schools have had similar experiences. More than 200 colleges have cut work hours because of the mandate, according to the College Fix, a higher education news source.
The Obamacare-fueled switch to part-time work is exacerbating our economy’s ongoing struggle to create full-time jobs. Andy Puzder, chief executive for CKE Restaurants, recently told a Senate panel that nearly 2 million people were working two part-time jobs last year. That’s the highest level since the government started tracking in 1994.
Even though the recession officially ended almost six years ago, there are still 6.8 million people working part-time today who want a full time job. An additional 6 million want a job but have quit looking altogether.
None of these data points suggests that Obamacare is helping working Americans.
Economists at Northwestern University’s Kellogg School of Management agree. They’ve concluded that the employer mandate is doing more harm than good to workers. Even the liberal Urban Institute’s research has demonstrated that the mandate will do almost nothing to increase the rate of insurance coverage.
The U.S. Supreme Court could strike a significant blow against the employer mandate — and thereby help businesses and workers alike — when it hears King v. Burwell on March 4. At issue is whether the federal government can provide subsidies for insurance purchased through the federal healthcare.gov insurance exchange.
Obamacare’s text suggests that the feds cannot. Section 36B clearly states that the government can offer tax credits only to those people enrolled in “an Exchange established by the State.” Healthcare.gov does not fall under that category.
A Supreme Court ruling against Obamacare would effectively repeal the employer mandate in the 37 states served by healthcare.gov. After all, businesses only face a penalty for not providing affordable insurance if their employees purchase subsidized coverage through the exchanges. No subsidies, no penalty.
Obamacare’s definition of 30 hours as full time would no longer be valid. Employers could put people back to work.
Several senators don’t want to wait for the High Court to act. Sens. Mike Enzi (R-Wyo.), John Barrasso, (R-Wyo.), Rob Portman (R-Ohio), and John Thune (R-S.D.) have co-sponsored legislation that would repeal Obamacare’s 30-hour rule nationwide — and define a full-timer as someone who works 40 hours a week.
Sens. Orin Hatch (R-Utah) and Lamar Alexander (R-Tenn.) have sponsored a measure that would go even farther — and repeal the employer mandate altogether. Twenty-six other senators have co-sponsored the measure.
The president may have assumed that companies would simply absorb the cost of his employer mandate. But companies cannot conjure out of thin air the thousands or millions of dollars needed to comply with the president’s diktats.
As long as Obamacare and its employer mandate exist, working Americans will continue to pay a hefty price.