Make us your home page

The health care Scrooge effect

For millions of Americans, all they really want for Christmas is decent health care coverage. It's a wish they've repeated over and over and now it will come true. Obamacare has withstood the legal and political onslaught of its enemies. On Jan. 1, 2014 — just a bit more than one year away — it will arrive. Americans of all ages, healthy and sick, will join their counterparts in every other advanced nation by having access to affordable health insurance. Hallelujah.

Joyous good tidings, indeed. But lurking in the background, like a modern-day Ebenezer Scrooge about to snatch the last lump of coal from Bob Cratchit's pitiful warming fire, are some of the nation's largest employers of low-wage workers plotting to make their employees' lives harder.

Think it's tough getting by on $10 per hour? Just wait until corporate executives finish slashing the hours of their restaurant, hotel and retail workers to under 30 per week. That's the plan. By slighting workers the hours they need to make any kind of decent living, employers will be able to dump their health insurance obligations under Obamacare onto taxpayers.

In the most high-profile case, Darden Restaurants, the Orlando-based owner of Olive Gardens, Red Lobsters and LongHorn Steakhouses, had announced that it was testing a plan to deny workers full-time schedules until a public outcry forced it to back down. Darden told the Orlando Sentinel in October that keeping employees at 28 hours a week was one possible way to "address the cost implications health care reform will have on our business."

Under the Affordable Care Act, employers with 50 or more full-time employees must provide affordable health insurance to their workforce or pay a penalty of up to $3,000 per worker beginning in 2014. The loophole is that the rules don't apply to part-time workers, defined as someone who works less than 30 hours on average per week. It was thought that companies wouldn't opt to turn a loyal, full-time workforce into an unstable and insecure one. Obviously lawmakers gave some employers too much credit for decency.

For instance, Pillar Hotels & Resorts, a company that controls hundreds of franchise hotels, including Sheraton and Holiday Inns, was featured in the Wall Street Journal as embarking on a plan to hire more part-time workers to limit health care costs. So too, CKE Restaurants Inc., the parent of the Carl's Jr. and Hardee's burger chains, told the Journal it is now hiring part-time workers to replace full-timers who left. And these are just the ones willing to fess up.

The median earnings for food and beverage workers was $18,130 in 2010, according to the Bureau of Labor Statistics. Think this offers wiggle room for waiters and bartenders to reduce their hours of work?

Part-time workers will get health care coverage, but you and I will pay for it. Under Obamacare, people making up to four times the federal poverty rate ($92,200 for a family of four) will qualify for federally subsidized health insurance from an online exchange, and expanded Medicaid will be available to everyone making under 133 percent of the poverty rate ($30,657 for a family of four) in states that opt to participate.

Then there's Walmart. As the nation's largest private employer and a notoriously low-paying one, no story of employer iniquity would be complete without it. Walmart already employs a disproportionate share of workers who supplement their wages with government benefits for the poor, especially Medicaid. Now the retail giant may be shifting even more of its health care costs to the rest of us.

In Walmart's 2013 "Associate's Benefits Book," employees hired after Feb. 1, 2012, who work fewer than 30 hours a week will be denied employer-sponsored health coverage, according to Alice Hines of the Huffington Post. This is worrying because workers have little control over their schedules. Company spokesman Randy Hargrove rejects Hines' insinuations. He says Walmart is "not looking to cut hours." But considering the company's track record, it strains credulity to think managers won't cut costs this way in the long run.

Remember how the ghost of Christmas-yet-to-come in Charles Dickens' story was so foreboding? Well, in one year, health care security will be the nation's Christmas gift to itself, but what mischief will befall low-wage workers as a result? Only the nation's Scrooges can say.

The health care Scrooge effect 12/15/12 [Last modified: Thursday, December 13, 2012 4:49pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times


Join the discussion: Click to view comments, add yours