Some public workers seen losing hours to health law

WASHINGTON - Cities, counties, public schools and community colleges around the country have limited or reduced the work hours of part-time employees to avoid having to provide them with health insurance under the Patient Protection and Affordable Care Act, state and local officials have said.

The cuts to public-sector employment, which has failed to rebound since the recession, could serve as a powerful political weapon for Republican critics of the health-care law, who claim it is creating a drain on the economy.

Although President Barack Obama has twice delayed enforcement of the health-care law’s employer mandate, which would subject larger employers to tax penalties if they do not offer insurance coverage to employees who work at least 30 hours a week, on average, many public employers already have adopted policies, laws or regulations to make sure workers stay under that threshold.

Even after the administration said earlier this month that it would ease coverage requirements for larger employers, public employers generally said they were keeping the restrictions on work hours because their obligation to provide health insurance, starting in 2015, would be based on hours worked by employees this year. Among those whose hours have been restricted in recent months are police dispatchers, prison guards, substitute teachers, bus drivers, athletic coaches, school custodians, cafeteria workers and part-time professors.

Mark Benigni, the superintendent of schools in Meriden, Conn., and a board member of the American Association of School Administrators, said the health-care law was having “unintended consequences for school systems across the nation.”

In Connecticut, as in many states, significant numbers of part-time school employees work more than 30 hours a week and do not receive health benefits.

“Are we supposed to lay off full-time teachers so that we can provide insurance coverage to part-time employees?” Benigni asked. “If I had to cut five reading teachers to pay for benefits for substitute teachers, I’m not sure that would be best for our students.”

In Medina, Ohio, about 30 miles south of Cleveland, Mayor Dennis Hanwell said the city had lowered the limit for part-time employees to 29 hours a week from 35. Workers’ wages were reduced accordingly.

“Our choice was to cut the hours or give them health care, and we could not afford the latter,” Hanwell, a Republican, said.

The city’s 120 part-time employees include office clerks, sanitation workers, park inspectors and police dispatchers.

Hanwell said new rules issued by the Internal Revenue Service this month did not address the city’s fundamental concerns about the cost of providing health insurance.

For months, Obama administration officials have played down reports that employers were limiting workers’ hours.

But in a report this month, the Congressional Budget Office said the health-care act could lead to a reduction in the number of hours worked, relative to what would otherwise occur.

Jason Furman, the chairman of the president’s Council of Economic Advisers, reaffirmed the White House view that the law was “good for wages and incomes and for the economy overall.”

Since Obama signed the health law in March 2010, the private sector has added more than eight million jobs. But in the public sector, the picture is different.

Government employment at the federal, state and local levels is lower today than in March 2010 by a total of 698,000 jobs, according to the Labor Department. And in a recent survey, the National Association of State Budget Officers found that “states plan to reduce the number of full-time employees again” this year.

It is not entirely clear how private employers will respond, but as some government officials point out, businesses at least have the option of passing along some of the additional costs to consumers.

In Indiana, Daniel Tanoos - the schools superintendent for Vigo County, which includes Terre Haute - said, “The school system has no way to increase prices as a private business can.”

The Obama administration says “there is absolutely no evidence” of any job loss related to the Affordable Care Act.

And the Congressional Budget Office says “there is no compelling evidence that part-time employment has increased” as a result of the law.

But economists tend to focus on the private sector, which employs more people and has been adding jobs, unlike the public sector.

Republicans in Congress such as Reps. Tim Griffin of Arkansas, Mike Kelly of Pennsylvania and Todd Young of Indiana said they know of public employers in their states that had restricted the hours of part-time employees.

Authors of the health-care law wanted more people to have insurance, Griffin said, but he asked: “What did they get? No insurance and less pay. Genius! That’s a genius federal program right there.”