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A spike in part-time employees eligible for benefits could drive up costs
Beginning in 2014, part-time employees working 30 hours or more per week will fall within the mandate for employer-provided health coverage, potentially driving up employer costs, according to a study by the research arm of benefits administrator ADP.
The findings of ADP's 2012 Study of Large Employer Health Benefits—which surveyed U.S. employers with 1,000 or more employees (including full-time and part-time workers)—found that:
By contrast, among part-time employees, who make up 23 percent of the U.S. workforce:
The gap between part-time and full-time insured workers looms large, as the "shared responsibility" provision of the Patient Protection and Affordable Care Act (PPACA) requires that, beginning in 2014, employers with 50 or more full-time equivalent employees either:
"Potentially, this provision could create a spike in part-time employees eligible for benefits starting in 2014," ADP spokesman Jim Larkin told SHRM Online. "The eligibility percentage remains a critical question because even small changes to this number can have a material impact on an employer's benefit costs. For this reason, we expect employers to manage and monitor part-time eligibility closely."
Bigger Is Cheaper
In 2012 the total reported health premiums surveyed employers paid averaged approximately $9,562 per participating employee, the ADP Research Institute found. However:
“An advantage of the $1,430 that the largest employers saved per participating employee per year is that they can redirect these savings to higher direct compensation, workforce training and development, or to the company's bottom line," Larkin said.
Possible explanations for larger employers' lower costs, according to the survey report, include:
Stephen Miller, CEBS, is an online editor/manager at SHRM.
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