Before the ACA's employer mandate was implemented, it was widely believed that organizations would need to adjust employee hours in response to it. In particular, it was expected that people working a little more than 30 hours per week would have their hours reduced so employers wouldn't have to offer health coverage. But if that happened, full employment and efforts to attract and retain top talent appears to have more than made up for it.
What It Means Now That More People Are Working Full-Time
According to the ADP Research Institute® report, The Affordable Care Act and Economics of the Part-Time Workforce: Measuring the Impact of the Affordable Care Act, full-time jobs have increased by 9 percent from 2010 to 2015 and the total number of part-time jobs has declined slightly. Furthermore, the data indicates that an increasing number of people are working part-time of their own volition, rather than being forced to do so because it's the only job they can find. According to the Bureau of Labor Statistics (BLS), the number of full-time jobs continues to increase and the number of people involuntarily working part-time continues to decline.
In other words, the ACA's employer mandate, while certainly part of workforce planning, hasn't resulted in a shift to a part-time workforce. The trend toward full employment has offset the predicted shift to a more part-time workforce. Although finance leaders must include ACA compliance in their planning, they've also had to work to attract and retain top talent in an increasingly competitive labor market where full-time jobs tend to be more popular. "The potential cost impact of the ACA doesn't change existing workforce dynamics," notes ADP. "It simply adds one more variable to the equation."
How to Balance Full Employment With ACA Costs
The economic growth over the last few years has resulted in more full-time jobs, and people who work part-time are increasingly doing so by their own choice. With that in mind, finance leaders still have to consider the cost of ACA compliance, as there's no doubt it's one of the factors that affect workforce planning budgets. According to Health Affairs, the ACA could be repealed, although it would have a protracted implementation timeline. But MSNBC reports that although nothing would change about health plans in 2017 or 2018, the employer mandate would be repealed "immediately."
A bill that passed Congress in 2015 but was vetoed by President Obama, would have repealed most aspects of the ACA after two years and called for retroactive repeal of the employer mandate, according to Congress.gov. The specifics of the bills that will be introduced to repeal and replace the ACA aren't known, but MSNBC reports indicate that the employer mandate could be eliminated soon. Until anything is legislated, it's best for finance leaders to include ramifications of the employer mandate in their workforce planning.
Numerous proposals for ACA replacement have been introduced over the last few years. None have any sort of employer mandate and it's unlikely the legislation used to replace the ACA will include an employer mandate. Still, there's a strong likelihood there will be a cap on the value of employer-sponsored health insurance that can be provided pretax.
Consider Employee Satisfaction In Response to New Legislation
Employee satisfaction is an important part of a finance leader's planning process. So even if lawmakers repeal the employer mandate, you'll have to balance the cost of providing coverage with efforts to attract and retain a top-notch workforce in a strong economic environment.
Although the ACA's employer mandate could end up being a short-lived provision, employees accustomed to having employer-sponsored health insurance — including those who have only recently been offered coverage as a result of the ACA — might resent having it stripped away. This will have to be taken into consideration as finance leaders plan their next steps in response to the upcoming possible health care reform legislation.
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