One of the mandates of Obamacare forces employers with 50 or more employees to provide healthcare benefits for all full time employees. In the same Obamacare regulation, they changed the definition of full time from 32 or more hours to only 30 hours.
Once the employer mandate went into effect, many employers began cutting the hours of employees from 40 hours a week to less than 30 hours a week to avoid having to pay for healthcare benefits. On the average, it costs many employers anywhere from $2,000 to over $5,000 a year for healthcare benefits per employee.
With just 50 employees, providing healthcare cost for those employees will cost an employer from $100,000 to over $250,000 per year. If the employer is operating on the typical narrow profit margin, spending or saving a quarter of a million dollars or more could make the difference of whether or not the employer remains in business or is forced to lay-off employees or close their doors altogether.
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It only makes good business sense to cut employee hours to avoid having to pay the ever increasing cost of employee healthcare. It’s cheaper to have 4 employees, each working 29 hours a week than it is to have 3 employees working 30 hours a week and having to provide them with benefits.
Numerous businesses have taken this cost saving measure even though the Obama administration claims there is no evidence that it’s really happening.
Now the University of Wisconsin-Madison has announced that they are limiting the number of hours students can work to 29 hours a week or less. The university lists only ONE reason for the new policy and that is Obamacare and employer mandate.
University officials admitted that this will hurt student academics because cutting their hours to a maximum of 29 hours a week will force many students to seek a second part-time job in order to survive. Having to work two part-time jobs places more stress on students and actually will take up more of their time which leaves them less time for their studies.
John Lucas, spokesman for the university, told the local media:
“A large percentage of our students are covered under parent’s coverage or UW-Madison Student Health Insurance Plan (SHIP), however this does not exempt UW from the ACA requirement to offer group health insurance coverage to students who average 30 hours per week or more. Therefore, UW must limit student working hours in order to be in compliance with the ACA.”
Luke Gangler, a member of the Student Labor Action Coalition, responded to the university’s announcement, saying:
“What many people don’t realize is that UW’s limited term employee’s income will be reduced by as much as 25 percent, making it incredibly difficult to provide for themselves and their families.”
“UW-Madison is very concerned about the hours cutback required by this law as many of our students are dependent on these hours to assist with educational expenses.”
What’s happening at the University of Wisconsin-Madison has been happening in many businesses around the nation and will continue to happen. Instead of providing affordable healthcare for more Americans, Obamacare is leaving more and more Americans without healthcare coverage while others face losing 25% of their income. How is this helping the average American?