Tags: Barack Obama | Healthcare Reform | Obamacare | disincentives | part-time workers | Wal-Mart

Study: Obamacare Creates Employment Disincentives

By    |   Tuesday, 07 October 2014 03:26 PM

Retail giant Wal-Mart announced plans Tuesday to cut health insurance for as many as 30,000 part-time workers in an attempt to stem rising healthcare costs, reports The Associated Press.

Employees who work fewer than 30 hours a week had been getting more than 75 percent of their premiums paid by Wal-Mart, but now will be forced to pay out-of-pocket or to secure government assistance or subsidies.

"We had to make some tough decisions," Sally Welborn, Wal-Mart's senior vice president of benefits, told The Associated Press.

One year after states began implementing Obamacare, its impact is being felt by businesses and consumers alike. And a new study predicts other employers will soon taking steps that could result in a reduction in overall employment.

The Mercatus Center at George Mason University has released a study which argues that the United States’ working population will face three major employment disincentives resulting from the very benefits of the Affordable Care Act (ACA).

It concludes that labor markets ultimately will reduce weekly employment per person by about 3 percent, or approximately 4 million fewer full-time-equivalent workers.

The report asserts the law's employment taxes create strong disincentives to work and that the structure of the health subsidies creates a scenario in which part-time workers those who work fewer than 29 hours actually gain more disposable income than working their normal full-time schedule.

The disincentive to work full-time will have a disparate impact on women, argues Casey Mulligan, the study's author. Because a greater percentage of women work just above 30 hours per week, they will be the most likely to move into what ACA defines as part-time work less than 29 hours.

"These new ACA employment disincentives are just two among many factors determining the kinds of work schedules that employers offer and employees accept. Regrettably, they are likely to have the unintended consequence of turning back the clock on decades of progress women have made in the American labor market," writes Mulligan in

Mulligan's findings echo the results of an Aug. 21 survey of businesses released by the Federal Reserve Bank of Philadelphia.

The Philly Fed asked qualitative questions about whether businesses were making changes to their employment and compensation and more than 18 percent of the firms indicated that the number of workers they employ was lower because of the ACA, while 3 percent indicated higher levels.

The same percentage (18 percent) indicated that the proportion of part-time workers had increased.

Another unintended consequence is that while the ACA required health insurers to cover certain types of medical care as a means to bring uniformity to the health care system, states continue to enact new mandates that avoid the law's mandates.

The result, reports Kaiser Health News, is that consumers are even more uncertain about whether their insurance covers specific procedures or health care services.

"Rather than forgoing mandates altogether, some states are simply excluding from the mandates plans that the states would have to pay for. The result: Consumers who buy individual or small group plans may not get the mandated benefits that are required in large group plans," wrote Michelle Andrews in September.

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Retail giant Wal-Mart announced plans Tuesday to cut health insurance for as many as 30,000 part-time workers in an attempt to stem rising healthcare costs, reports The Associated Press.
Obamacare, disincentives, part-time workers, Wal-Mart
Tuesday, 07 October 2014 03:26 PM
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