Since the OBAMACARE was foisted on the citizens of our once great nation, several large employers, ranging from restaurants and fast food establishments to colleges that rely on part time instructors with lots of part-time employees have announced plans to limit their employees to 25 hours per week in response to Obamacare. While they’ve taken a lot of criticism for doing this, it’s worth looking at why Obamacare incentivizes employers to do exactly what they’ve done. In short, they are not taking advantage of a “loophole” — they are simply responding to the law’s requirements and its definition of a “full-time” employee.
The “Affordable Care Act” requires “large” employers – those with 50 or more full-time-equivalent employees – to either provide “qualified” health coverage for all of their full-time employees, or pay an annual penalty of $2,000 per full-time employee (after the first 30) if they don’t provide such coverage. If they do provide coverage but it’s not “affordable,” the penalty is $3,000 per employee who finds it “unaffordable” (with a cap at the penalty they’d pay for not offering coverage at all). Read the rest of this entry »