Questions surround federal health care rules related to Affordable Care Act

Though portions of the Affordable Care Act have been phasing in since its adoption in 2010, the new legislation grows teeth Jan. 1 and Hancock County governments, businesses and school districts are taking notice.

Large employers who have part-time staff working between 30 and 40 hours a week, for example, will be required to provide health insurance.

Failure to provide the coverage for 95 percent of the employer’s workforce could result in significant monetary penalties from the federal government.

And while the law was designed to provide more Americans with affordable health care, there’s plenty of uncertainty surrounding the new regulations.

“There’s mass uncertainty,” said Jim Matthews, attorney with Bose McKinney and Evans in Indianapolis who has been advising clients on the act. “There are so many surprises in this law, and they just keep coming and coming.”

Schools feel crunch

Because schools begin in just a few months, county districts are already implementing strategies to meet the new regulations.

“Schools are in an enormous mess because they can’t raise the price of goods, so they have clearly been out in front of this one,” Matthews said.

The Eastern Hancock School Board elected earlier this month to limit the majority of its non-contract employees who worked between 30 and 40 hours per week to 29 hours.

The decision generally affects bus drivers, cafeteria and food service workers, instructional assistants and non-contract coaches paid on seasonal stipend.

It remains to be seen how the changes will affect the district’s workforce, many of whom worked at the district without insurance to be near their children and also have summers and holidays off.

“Now, their hours are getting cut, they’re losing that benefit, and they’re still not getting health care.” EH Superintendent Randy Harris said

Those employees currently receiving health insurance will continue to receive the benefit even if their hours are cut, however, Harris said.

Ironically, the district might have to hire additional personnel to make up for the lost man hours, Harris said.

The new law will also require the district to closely monitor hours put in at concession stands and ticket booths to ensure affected employees do not exceed the 30-hour average when they moonlight during games and other events.

Educational assistants for students with special needs will also be affected by the new law. Hancock Madison Shelby Educational Services assistants will not be allowed to work more than 28 hours a week starting June 1. The agency has 48 instructional assistants that work with teachers and students 7 to 7.5 hours a day.

“These have been very difficult decisions to make because of the impact they have on our teachers, students and staff,” HMSES Director Karen Niemeier said.

They plan to work around it by hiring more assistants, so students don’t suffer. Still, it hurts many staff members who have been used to working 35 hours a week and need the pay. The board is concerned they could lose quality employees who are looking for more than 28 hours of work per week.

Congressman Luke Messer says the impact of the law on part-time employees is something civic leaders are just beginning to recognize.

Messer, a freshman Republican lawmaker from Shelbyville, said reducing teachers’ aids to be in compliance with the law is just one concern. That not only puts a strain on teachers, but it also impacts the educational level of students.

Messer testified on the issue at an educational committee meeting earlier this year. He also voted to repeal the Affordable Care Act last week in one of many efforts by the House in recent years to put an end to the law and start from scratch.

“I voted for its repeal, … but I think it’s now time to turn and look: short of an appeal, what can we do to improve the law?” he said.

If the act is not repealed, Messer said he would support tweaking it so it doesn’t reach as many people. Raising the 30-hour threshold to 40 hours, for example, would mean people who are working 35 hours would not be threatened of having their jobs cut back. He’s also supporting changing the threshold of the employers who are affected by the new law.

Currently, those who have at least 50 employees are affected by the act, and Messer said he’d be in favor of increasing that threshold to 100 employees. Schools, universities and municipalities should also be exempt from the law, he said.

Looking for answers

In addition to schools, local units of government are also struggling to know what to do with part-time employees under the new federal mandates.

Hancock County, for example, has 48 part-time employees; a dozen or so work more than 30 hours a week. Those are individuals for whom the county could be required to provide health insurance.

The Hancock County Commissioners budgeted for a 20 percent increase in health insurance costs for 2014, still not knowing the full impact of the Affordable Care Act. Details of the 2014 budget will be worked out in the next few months, and one discussion point will be whether to cut the hours of some part-time employees or make them full-time.

“Normally, you would benefit from two part-time positions rather than a full-time position,” Commissioner Brad Armstrong said. “But if your part-time position is going to get over 30 hours, then it incurs the cost in benefits, there’s really no savings in doing that.”

Many of the county’s part-time employees are in the community corrections department, said Mary Bowmer, payroll administrator. Adding health insurance for a single employee will come at a cost of more than $6,600 for the county.

The city of Greenfield has only a couple of part-time employees that work more than 30 hours a week, said Clerk-Treasurer Larry Breese.

Breese said the city won’t offer health insurance to those employees because it’s a small percentage of the total workforce. There’s a provision in the requirements that allow employers to be 95 percent in compliance with the law. The two employees affected make up less than 1 percent of the city’s’ total workforce, Breese said, so even if the city doesn’t offer them health insurance it would still be in compliance with the Affordable Care Act.

Weighing the costs

The 30-hour rule is also catching attention in the private sector.

“We have a certain population of part-time (concrete truck) drivers, and what we’ve suggested is that they do not work any more than 30 hours,” said Sandy Sandifer, payroll and benefits manager for Irving Materials Inc., a Greenfield-based building materials supplier.

As in the case of school districts, limiting employees to 30 hours in the concrete construction industry is going to be tricky, Sandifer said, because of the very nature of the work, which is fraught with scheduling and weather issues.

“Sometimes, we do 75 percent of our (weekly) business in three days,” she said.

IMI maintains an electronic time-keeping system, which will help in tracking employee hours; however, company managers will most likely have to monitor hours on a daily basis, “and that’s going to be difficult,” she said.

Monitoring employee hours is just one of the issues Greenfield-based furniture manufacturer University Loft Co. is trying to address as the new regulations loom.

“It’s complicated for us because we have a lot of seasonal employees,” said company chief financial officer Vincent DiBenigno.

ULC begins ramping up furniture fabrication in May to deliver to its prime customers – colleges and universities – in July.

“After that we tail off dramatically,” DiBenigno said.

Like IMI, DiBenigno said his company will have to watch employee hours closely to determine how many reach the 30-hour threshold.

One thing DiBenigno and others have discovered is sorting through the new rules has been an administrative burden.

“We’ve invested heavily in trying to understand this and taken certain steps to know we’re going to comply, and it takes your eye off the ball (of daily administration),” he said.

Hancock Regional Hospital, which relies heavily on employees who work fewer than 40 hours per week, said HRH is still examining alternatives ahead of formulating a plan in June.

“We do not have any firmness yet on anything, unfortunately,” said Rob Matt, HRH vice president of business development. “We can’t say what might happen to those who work less than 30 hours a week or those that work more than 30 hours a week, but you do have that line in the sand.”

Matt said there is little time to waste in reaching a plan, however.

“I’m advising my clients to have a plan in place no later than June 1,” he said. “Clearly, time is of the essence.”

The one sure thing in a brewing sea of uncertainty surrounding the new law is that Hancock County employers will have to get on board and adapt come Jan. 1.

“It’s play or pay,” Sandifer said. “We’ll just have to keep our fingers crossed that we don’t get into a boatload of trouble.”