In the beginning of the year 2010, the Patient Protection and Affordable Care Act (ACA) was passed and enacted legislatively by Congress in order to increase public access to health care at a reduced cost. The ultimate goal of the ACA was create a better overall atmosphere for workplace heath and safety by making healthcare more affordable. However, the passage of the ACA did have some unforeseen consequences in regards to worker compensation. The ACA was passed in order to increase government funding which would cheapen medication costs for the average American worker and thus make more effective healthcare more affordable.
For most American workers there is often a “doughnut hole”, or coverage gap in their healthcare plan. This means that some of their expenses may be covered by employer-provided healthcare and social programs like Medicare or Medicaid may cover some, but there is often a gap between these two plans in which the individual must pay large amounts out of pocket. This usually happens as when employer health care plans run out, there is a certain amount of money that must be paid out of pocket before governmental coverage plans kick into effect.
This results in many workers not taking necessary medications during the coverage gap in order to save money, but adversely affects the health and safety of workplace environments, as people are not getting the treatments that they need. The ACA is not only increasing governmental funding to shorten the gap from the tail end, it also is aimed to create more employer-provided healthcare, which would father shrink the coverage gap from the front end as well. To do this, the ACA created a requirement that stipulated all companies that employed over 50 people for more than 30 hours a week would have to provide healthcare for their employees.
This was intended to have a positive impact on health and safety in the workplace by creating more health-care coverage plans; however good intentions may have cause more problems than they solved. Thomas Moran, the CEO of Addison Group, wrote an article entitled “How healthcare reform has changed the American workforce” which outlined his theory on how the ACA could have negatively impacted the American workforce. Moran starts the introduction of his theory by examining the recent changes on the job market front.
At first glance, it would seem that 2013 has been going remarkably well with over 1 million new jobs being created. However Moran cautions against believing this to be true and urges for a closer look at the numbers. And his findings are startling. While it would seem that the job creations are certainly a positive thing, in reality over 75% of the jobs that were created were low-paying part-time jobs, not sufficient sources of income to provide for the typical American family. Thomas Moran believes that this is indicative of a new negative employer-hiring trend.
Most companies simply could not afford to suddenly provide their entire workforce with a comprehensive healthcare plan that the ACA required of them with its passage, so they turned to a new tactic; part-time employment. The ACA doesn’t call for any healthcare plans for part-time workers, nor should it due to the temporary nature of the job type. However, now companies that may have had 80 full-time employees, whom they are required to provide healthcare for, have decided to slash their workforce to stay within the ACA’s new regulations.
Now instead of a large full-time workforce, many companies are trimming down to 45 full-time employees that work over 30 hours a week, complemented by a sizable part-time workforce that maintains around 20 hours of work. They have begun doing this in an effort to avoid the “50 employees of more” clause of the ACA and thus avoid providing any in their workforce any form of a healthcare plan. Moran claims this has led to many Americans needing to hold down two part-time jobs simply to provide for their families while they are still without healthcare coverage plans.
Furthermore Moran believe that this would harm the entire work-force as a primarily part-time workforce is one made up of temporary hires that tend to be less specialized and less involved than a full-time employee. It also hurts the compensation benefits of nearly everyone in the workforce, whether it be those let go or those relegated to a part-time position. So now essentially many individuals in the American workforce were denied a chance at health insurance as well as being relinquished of a full-time job.
Thomas Moran brings up an excellent critique of the ACA by connecting the dots from a growing negative trend in the American workforce to its root cause. It is a very difficult problem to tackle and while Moran discovers its source he doesn’t really offer many possible solutions other than saying that the creation of job must mean the creation of full-time jobs that can provide for a typical American family. It is hard to come up with solutions because the ACA was really intended to be beneficial to the American workforce and increase its health and safety overall.
Unfortunately it had untended negative effects on the compensations of the American workforce instead. Maybe the ACA could have created a mandate that would have prevented the employers from drastically reducing their workforce in a short period of time, but they could have not possibly foreseen this happening and the damage is likely done by now. It could have been handled well in theory but I’m not sure that would have ever happened in reality, but hopefully better ideas will soon arise to create more full-time jobs as that could be the solution to the problem.