Magazine article HRMagazine

Part-Time Benefits: A Moving Target

Magazine article HRMagazine

Part-Time Benefits: A Moving Target

Article excerpt

Health care reform may cause employers to reconsider benefits they offer to part-time employees.

This summer's Supreme Court decision upholding the Patient Protection and Affordable Care Act has employers scrambling to redefine "part time." Under the law, employees who work 30 or more hours a week will be considered full time and will be eligible for health care coverage. This requirement means companies with 50 or more full-time employees have to reassess their entire range of benefits.

"We are just planning the best we can," says Tyler Sanderson, director of total rewards at BlueCross BlueShield of Tennessee in Chattanooga.

Uncommon Benefits

Part-time workers made up 22.2 percent of the workforce in 2011, up from 16.7 percent in 2007, according to the Employee Benefit Research Institute. The Bureau of Labor Statistics reported that there were nearly 35 million employees working fewer than 35 hours a week in 2011.

But relatively few employers offer benefits to their part-time workers.

In 2012, 28 percent of organizations of all sizes that offer health benefits offer them to part-time workers, according to the 2012 Employer Health Benefits Survey report from the Kaiser Family Foundation and the Health Research & Education Trust. That is a notable increase from the 16 percent reported in 2011, but in line with the 25 percent reported in 2010.

Larger employers are more likely to offer health benefits to part-time employees. In 2012, 45 percent of employers with 200 or more full- and part-time employees offer benefits to part-timers, compared with 28 percent of smaller companies, the survey of 3,326 public and private employers showed.

Part-time jobs are common in the retail, food services and construction industries. They are often low-paying and typically do not require advanced skills or training.

Employers with the most part-timers are the least likely to cover them, says Beth Umland, director of research for health and benefits at Mercer in New York City. "In companies where there may be some part-timers but the business model is not built around them, those working 20 or more hours are covered. In industries where part-timers make up at least 10 percent of the workforce- which includes two-thirds of retail and hospitality and 59 percent of health care employers-there has been the business decision not to cover them because it is expensive," she explains.

Premium Plans

While Wal-Mart announced last year that all new employees working fewer than 24 hours a week would no longer be eligible to participate in company health care plans, a number of employers with significant part-time populations continue to offer health coverage.

In most cases, these plans are the same ones offered to full-time workers, but part-time employees pay a greater percentage of the premiums. On average, part-time employees at large companies pay 35 percent for individual coverage and 41 percent for family coverage, while full-timers pay 22 percent and 30 percent respectively, Umland says. Here are three diverse examples:

* East Providence, R.I.-based Rhode Island Medical Imaging has three tiers of part-time employees. While they all receive the same health care benefits as full-time co-workers, each tier pays a different percentage of the premium: Part-timers working 20 to 28 hours a week pay 55 percent, those working 29 to 34 hours pay 45 percent, and those working 35 to 39 hours pay 35 percent. Full-time workers pay 25 percent of the premium. All employees have a $2,000 deductible but must cover only the first $500, with the company providing the rest.

* BlueCross BlueShield of Tennessee part-timers, who work 20 to 39 hours a week, make up 5 percent of the company's 5,300 employees. They pay twice the rate as full-timers but are eligible for the same preferred provider organization or high-deductible health plans and company contributions to health savings accounts as full-time co-workers. …

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