Shift To Part-Time Employment Was Underway Before Enactment Of ACA

Since the enactment of the Patient Protection and Affordable Care Act (ACA), there have been concerns that the requirements of the federal law will cause more employers to shift to part-time workers. However, a recent report from the Employee Benefit Research Institute (EBRI) found that while there is no definitive answer yet, the shift to part-time employment was underway before the ACA was passed, and future trends are likely to depend more on factors such as the economy and unemployment rates.

Background. The ACA requires that employers with 50 or more full-time employees provide health insurance to workers, or pay a penalty if they fail to provide health coverage to workers. The provision was originally intended to be effective in 2014, but it has been delayed until 2015 for employers with 100 or more employees and to 2016 for employers with 50 to 99 workers. This employer mandate has raised concerns that employers will reduce full-time workers to avoid providing health coverage to workers, or reduce health coverage provided to part-time workers.

Part-time employment since enactment. The EBRI report, Trends in Health Coverage for Part-Time Workers, 1999–2012, found that the recent recession had already resulted in an increased use of part-time workers before the ACA was enacted. Between 2006 and 2010, the percentage of workers employed fewer than 30 hours per week increased from 11.9 percent to 14.1 percent, and the percentage of workers employed 30 to 39 hours per week increased from 11.4 percent to 13.2 percent. The analysis notes that this may be due to the drop in the unemployment rate, which fell from 9.9 percent in March 2010 (the month ACA was signed into law by President Obama) to 7.9 percent by the end of 2012. Since the end of 2012, the unemployment rate has fallen to 6.6 percent.

“Since the enactment of ACA, the percentage of workers employed less than 40 hours per week has actually declined slightly,” said Paul Fronstin, director of EBRI’s Health Education and Research Program. “At the same time, while both full-time and part-time workers have experienced drops in coverage, part-time workers have been affected disproportionately.”

According to EBRI, part-time workers have a far lower rate of health coverage than full-time workers. Overall, there were 20 million workers employed less than 30 hours per week and 18.8 million employed 30 to 39 hours per week in 2012. Among those employed fewer than 30 hours per week, 2.6 million (12.8 percent) had employment-based coverage from their own job, and among those employed between 30 to 39 hours per week, 6.3 million (33.6 percent) had employment-based coverage from their own job. In contrast, 60.5 percent of workers employed at least 40 hours per week had employment-based coverage from their own job.

A key related issue is dependent health coverage for children or spouses of part-time workers, which has been sharply declining. EBRI found that the likelihood that a worker employed fewer than 30 hours per week had employment-based coverage as a dependent fell substantially between 2000 and 2009. In 2009, 35 percent of these workers had dependent coverage, down from 46.8 percent in 2000. During this time, the percentage of workers employed 30 to 39 hours with coverage as a dependent fell from 26 percent to 20.5 percent, while the percentage of workers employed 40 or more hours per week with coverage as a dependent was mostly constant except for a slight drop from 2003 to 2004.

The report was published in the May 2014 EBRI Notes. For more information, visit http://www.ebri.org/pdf/notespdf/EBRI_Notes_05_May-14_PrtTime.pdf.
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