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Curmudgeon's Corner

cur-mud-geon: anyone who hates hypocrisy and pretense and has the temerity to say so; anyone with the habit of pointing out unpleasant facts in an engaging and humorous manner

Getting Serious About PPACA/ObamaCare

U.S., Wisconsin, Taxes, Healthcare, Employment, Political, Quality of Life

PPACA, or ObamaCare if you prefer, is beginning to have an effect on employer planning even for those employers who hoped it would go away.  Reality is here and things will be changing as the result.  Some of the changes that can be expected in the workplace include:

***Employers with fifty or so employees will need to determine what they’ll do as the result of ObamaCare.  They can reduce the number of employees to be sure they are operating year-round with fewer than fifty employees even though they may have to reduce their volume.  Some of that is beginning to happen.

***Employers with fifty or fewer employees are beginning to assess whether they are better off paying the $2,000 per year fine on each employee over thirty employees than they are to continue to provide health plan coverage.  Given an annual average cost of health plans at some $8,000 to $10,000 or greater per employee, this exercise takes a very short time.  If the employer paid the fine and provided employees with a bonus to help them buy their own policies, they’d still be ahead of the game.   

***Employers are beginning to assess moving full-time employees to part-time status in situations where specialized skillsets aren’t a requirement.  If little training is required, these firms can operate without too many hiccups using this kind of approach.

***Employers that have historically operated with part-time employees are beginning to get even more creative.  Two restaurant owners, not connected to each other, are reported to have struck a deal where one will employ his staff for 20 to 25 hours over three days, and then switch with the other employer to have that employer’s part-time employees work 20 to 25 hours for the rest of the week.  The employees will still be working their desired number of hours, but they’ll move from one location to another to get their hours in each week.

***Employers are assessing what they can do so far as ending their sponsored health plans while providing the money saved to employees to permit them to buy individual policies thus removing the employer from the hassles.  Those employers risk losing skilled employees but may escape that attrition by providing money for premium.  There is a tax impact for the employee that doesn’t now exist.

***Some employers that have never before relied on staffing firms to obtain necessary staffing are now thinking seriously about doing so.  These employers would bring in the employees of the staffing organizations on long-term assignments thus avoiding the need to supply health care plans directly even as they supply those plans indirectly through the fees being paid to the staffing firms.

The idea that such a sweeping change can be made in the employer-employee relationship structure without these kinds of unintended consequences is only possible for people who have never been employers or employees in the private sector.  If I were a career government employee, I would have little idea about the kinds of things that happen in the ‘real’ world.  If I were a career government employee or a career elected official, I would probably have never stopped to consider unintended consequences since those seldom exist in my world.

The real world has never permitted employers to operate in a vacuum, and it has never protected employees from the vagaries of ‘at will’ employment that are created by government actions.

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