News From Terre Haute, Indiana

June 25, 2013

Affordable Care Act insurance mandates leading some businesses to cut employees’ work hours

Sue Loughlin
The Tribune-Star

TERRE HAUTE — Similar to other businesses across the country, Wolfe’s Auto Auction in Terre Haute says it is cutting work hours of several of its employees because of the insurance mandates of the federal Affordable Care Act.

Ten full-time employees will be reduced to part-time status, while part-timers will work no more than 25 to 28 hours per week, said Dan Wolfe, one of the owners of the family-owned business.

The reason cited? The Affordable Care Act defines a full-time worker as anyone who works 30 hours or more each week, and businesses will be required to provide health insurance to all of their full-time employees.

As a result, many employers, including government agencies, say they are reducing hours of workers to avoid that mandate.

Wolfe’s is no exception. Wolfe said that at the Terre Haute location, the business will go from about 25 down to 15 full-time employees. The Terre Haute location also has more than 70 part-time workers, he said.

The company does provide health insurance to its full-time workers, he said.

The company has sites in Evansville and South Bend that also will be impacted.

The new health care law affects the business in other ways as well. “I have to provide my full-time employees an insurance package that does not exceed 9.5 percent of their gross pay,” he said. That will be an additional cost to the business, and those employees “won’t see raises like they would have” otherwise, he said.

Indiana Congressman Larry Bucshon, a Republican representing the 8th District, visited Wolfe’s on Monday. He said he agrees with legislation introduced by U.S. Sen. Joe Donnelly, who wants to move the threshold for providing insurance to 40 hours per week. It is called the “Forty Hours is Full-time Act of 2013.” The co-sponsor is Sen. Susan Collins, R-Maine.

“It’s a big problem,” Bucshon said. “I think ultimately you’ll see members of Congress like myself try to address things like the 30- hour definition of a work week.”

He believes it will be a bipartisan effort. “People recognize this is an impending storm,” Bucshon said.

Unless it’s addressed, “We’ll become a nation of part-time employees,” the congressman said. There are many other issues associated with the Affordable Care Act that need to be addressed.

The law, as written, and reduction of employee hours to avoid the insurance mandate, is hurting the economy, he said.

He believes every citizen should have quality health care at a reasonable price, but he doesn’t believe that will happen — even with the Affordable Care Act — until the problem of escalating health care costs is addressed.

There’s evidence that even after Obamacare is fully implemented, millions of Americans may still not have health insurance, he said.

“We need to get the cost down so individuals and businesses can afford to have health insurance coverage,” he said.

The key to controlling health care costs, in his opinion, will be free market competition and price transparency throughout the health care system.

A representative of the Obama administration disagrees with the grim outlook some have related to the Affordable Care Act.

“This law will decrease costs, strengthen small businesses and make it easier for employers to provide coverage to their workers, as we saw in Massachusetts, where employer coverage increased when similar reforms were adopted,” said Fabien Levy, press secretary with the U.S. Department of Health and Human Services.



Sue Loughlin can be reached at 812-231-4235 or sue.loughlin@tribstar.com.