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Why the Health Law Won't Lead to an Explosion of Part-Time Workers

Ilana Novick

Critics of the Affordable Care Act have long been calling it a job killer. First, they claimed, companies would cut jobs altogether because of the mandate that all full-time employees must have health coverage. Then, as Sara Kliff wrote in a recent Washington Post column, there's the question of whether instead of eliminating jobs entirely, companies would drop as many employees as possible down to part time instead.

With these changes ahead, will employers scramble to change employees hours in order to save costs on healthcare? Will the hard-fought battle for expanded coverage end in job losses? Fortunately, according to Kliff's initial research, the answer is so far no, or at least, not yet. Furthermore, an article in Kaiser Health News suggests that that this supposed job killer will actually create 9,000 more jobs, in the form of call centers staffed to answer consumer inquiries about their new coverage. 

The health care law requires companies with 50 or more employees to provide affordable insurance coverage to full-time workers. For those who work less than 30 hours per week, as Kliff notes, the story is different: A company does not get penalized for not providing health insurance coverage. Despite this option, a recent study from the Federal Reserve Bank of Minneapolis found that only 4% of companies had moved to a larger, part-time workforce in response to the Affordable Care Act. 

If the new law is such a job killer, and the price of insurance companies so burdensome, why did only 4% opt to expand their part-time workforce? According to Chistopher Ryan, a Vice President of Strategic Services at ADP, quoted in the Washington Post article, it's a trade off between saving money on benefit costs, and investing the time and money in training all of the new workers that an expanded part-time workforce would require. Sure the average cost of the new benefits is around $9,562 but it might be worth it to companies to cover those benefits while keeping their already existing, likely better-skilled workforce. 

Ryan uses the example of a busy restaurant on Valentine's Day: would the restaurant manager rather have skilled, experienced waiters providing customers with the quality experience they've come to expect, or replacing said waiters with a newer, less-competent staff only because the experienced waiters had already worked the maximum of 30 hours? Not to mention that scheduling and keeping track of many more staff members and their need to only work a certain number of hours is an administrative headache for many employers. 

As for the job creation prospects, according to Kaiser Health News, Vangent, a subsidiary of General Dynamics, the company that received the one-year $530 million contract from the Federal government to run the centers, will set up exchanges in 34 states where they will be run either in whole or in part by the Federal government. The rest will set up their own marketplaces with their own call centers, hopefully also creating a comparable number of jobs.  

The Department of Health and Human Services has yet to name the lucky 14 states where the call centers will be based, but they are expected to be hiring approximately 9,000 customer service representatives to field questions about the new coverage. 

It's worth keeping an eye on these trends as the 2014 deadline draws closer, but so far, the job killing fears have yet to be borne out. Hopefully employers will continue to prize full-time, skilled workers enough to ensure they get health insurance. Health insurance should be a job creator.