Will Obamacare cause your Employer to Reduce your Hours
The U.S. Supreme Court voted to uphold the health care reform law five to four, last Thursday. While most folks refer to this high-profile piece of legislation as “Obamacare”, it is actually called the Patient Protection and Affordable Care Act (PPACA). And no matter which side of the political fence you occupy, it is going to change our economy in one way or another.
The Individual MandateAt issue in the legislation was the individual mandate clause. In it, the federal government compels Americans to buy health care insurance they do not receive from an employee-sponsored plan - individuals with health insurance are not subject to the mandate. The court upheld the mandate, citing it as a tax - something protected by the Constitution. But what does all of this political rhetoric mean to Americans and their jobs - and, more importantly, their health care, which is often provided through their employer? Is there potential for employers to cut hours because of the constraints the ACA imposes?The ACA is undeniably the most significant social reform passed in the U.S. since President Lyndon Johnson passed Medicare in 1965. Unfortunately, with so many variables at play, there's no perfect case study to predict how employers and employees will be affected under the ACA.
Opponents claim that the ACA will lead employers to cut jobs, while supporters expect the economy to add jobs and improve based on the affordability of healthcare.
What We Know
Massachusetts, under Mitt Romney, enacted a universal health care law in 2006. “Romneycare” as it was called, served as the inspiration for the national healthcare overhaul. Nonpartisan experts who have studied the Massachusetts law find no negative impact to employers or employees under the law. So, using model and school of thought, everything should be “fine”.
Romneycare v. Obamacare
Astudydone by the Urban Institute suggests that the federal health care reform law won't cause job loss or cutbacks on hours.The authors of the study determined that the Romneycare and Obamacare were close enough in makeup to create a working model for comparision. However, the authors concede: "Economic theory suggests that when employers are required to offer health insurance coverage ... employers will reduce wages and ... employers may respond by demanding less labor."Portions of the ACAthat kick in as of 2014 should offset the higher health care costs for employers, which (experts hope) will reduce the likelihood for layoffs and cutting back hours. However, until that point, it’s still uncertain.A Grim Future?
ACA critics foresee negative fallout, including the$1.4 trillion dollarstaxpayers will need to fund the program over the next 10 years. These critics argue that the bundling programs will not make health care more efficient; instead, they believe it will do the opposite. Critics see the mandate and the legislation as a whole as a precursor to more to job loss and higher taxes for all.To substantiate this, three quarters of 1,339 small-business executives said that the ACA makesit more difficult to hire people.
For most Americans, this new legislation instills hope and fear in equal portions. And even though the Supreme Court ruled in favor of Obamacare, the jury is still out regarding how it will affect employers, and more importantly, your wallet. For now, all you can do is sit tight and hope for the best, but plan for the worst.
