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Under Obamacare, Employers Might Re-Consider Peak Time - Part Time

Much is being written concerning various provisions of the Affordable Care Act (ACA or Obamacare) including the options faced by many companies with low-wage/part-time workers, typically in the services industry.

Even though the employer mandate under the ACA has been pushed back a year, employers with substantial numbers of part-time employees would be wise to understand their options as well as the options of their employees. There are important compliance requirements to be met by 2015 that call for rigorous analysis of compensation strategies and head count. Companies should be familiar with the health care benefit provisions under the law and avail themselves of advice from their compensation and benefits advisors.

With respect to low-wage/part-time employees there might be an effective way to re-structure work flow that has shown to be efficient and that could lead to a compliance strategy under ACA. It’s known as the Peak Time/Part-time (PT/PT) Model, based on queuing theory. PT/PT should be thought of as a business process which (highly simplified) calls for employers to:

  • Analyze their work force, identify hourly levels and locations of part-time workers and peak business times
  • Conduct a queuing model exercise to determine if paying a part-time worker a premium rate during peak hours, with lower hourly wages during off-peak times, is feasible and can be equitably rolled-out among part-time workers
  • PT/PT workers may indeed not qualify for nor need company-provided health care benefits because the federally subsidized rates, to be offered in the fall by health exchanges in many states, will be a more affordable option to these employees.  In all cases, remember that the ACA specifically disallows reorganizing workers’ hours to avoid offering coverage. However, PT/PT may be an alternative acceptable to the worker and the employer under ACA. Again, consult your compensation and benefit advisor.

Don’t let the year’s delay in the employer mandate slip by. It will be prudent and perhaps cost-effective to take time now to explore compensation and employment options and health care benefits for part-time workers under ACA, including PT/PT.

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