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Maine Workers Begin to See Changes in Coverage Under ACA
09/13/2013   Reported By: Patty B. Wight

Trader Joe's, the popular national grocery chain, announced recently that, as of January 2014, it will discontinue health insurance coverage for part-time employees, and direct them to buy health insurance on the new online marketplace that opens next month under the Affordable Care Act. Trader Joe's is not the first business in Maine to change its employees' benefits or hours in light of the new health care law, as Patty Wight reports.

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For months, news headlines have warned of hiring freezes and cuts to employees' hours, as businesses brace for the Affordable Care Act. The federal law requires businesses with at least 50 full-time employees to provide health insurance to those working full-time hours, which, under the law, is defined as 30 hours a week or more.

There are even reports of possible new hour restrictions in the public sector, says Eric Conrad of the Maine Municipal Association. "Yes, we are hearing anecdotally that if towns and cities have part-time employees that are, let's say, in the 30- to 35-hour range, that they are considering cutting those to below 30 hours to reduce their health care costs," Conrad says. "That is being talked about."

Conrad says it's important to note, however, that in Maine, relatively few municipal employees are part time. In the private sector, says Dick Grotton of the Maine Restaurant Association, some businesses are also considering cutting employee hours.

"It really has forced restaurants and other labor-intensive businesses to take a long, hard look at their position, their cost, and what moves they might make to ameliorate the costs," Grotton says.

The threat of new limits on employee hours has garnered the attention of Republican Sen. Susan Collins, who introduced a bipartisan bill this summer that would increase the defined threshold for full-time as 40 hours a week. In a weekly GOP address last month, Collins warned that the Affordable Care Act's definition of 30 hours would result in reduced employee hours and fewer jobs, and she cited the Bangor School Department as a prime example.

"A school system in my state of Maine is already preparing to track and cap the number of hours that substitute teachers can work to ensure that they don't work more than 29 hours a week," Collins said. "Fewer hours means less money in the teachers' paychecks, and more disruption for their students."

But the Bangor School Department's director of business services, Alan Kochis, says that in reality, not that many employees in the school ssytem would be affected.

"We have tutors and substitute teachers who fall into this class, and there aren't a lot now that are working over 30 hours," Kochis says, "and if they are, it's not on a permanent basis."

Then there's Trader Joe's, which is based in Caliornia, but operates stores nationwide, including one in Portland. The company says that as of January 2014, it will discontinue health insurance benefits for employees working fewer than 30 hours a week.

In a written statement, the company says the change will affect less than a quarter of its employees, and predicts that most of those will ultimately pay less for health insurance through the online marketplace. Mitchell Stein, of Consumers for Affordable Health Care, says that's entirely possible.

"Given the presence of the subsidies on the individual market, those part-time employees may be better off going to the individual market and potentially getting a subsidy for their coverage."

Stein says businesses have to decide on their own what policies are best for them and their employees. The Maine State Chamber of Commerce President Dana Connors says many of his constituents are anxious and uncertain about how to comply with the Affordable Care Act.

"The enemy of this is what we don't know, and the responsiblities and the cost that go with trying to understand what we have to do, and what it's going to cost for us to do it," Connors says.

Though Maine businesses may still be undecided as to whether to cap hours, reduce hiring, or cut benefits, a report from the independent International Foundation of Employee Benefit Plans has found that only 16 percent of the 1,000 members it surveyed are adopting such measures. However, those who are acting are more likely to be small businesses.


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