LINCOLN, Neb. (AP) — A lawyer for Nebraska public school districts said districts are considering cutting thousands of part-time non-teacher employees' hours next year to avoid offering them health insurance benefits mandated by the Affordable Health Care Act.
The act requires large employers — those with at least 50 full-time equivalent workers — to cover at least 60 percent of health care costs for employees who works more than 30 hours per week, putting some businesses and government agencies in a difficult position.
Karen Haase, a lawyer who represents about 150 school districts throughout Nebraska, said thousands of non-teaching employees — including teacher aides, bus drivers, custodians, cooks and clerical staff — could be offered extended health benefits, have their hours cut or be laid off. With tight budgets, Haase said she doubts many districts will offer benefits to part-time staff working more than 30 hours.
Some smaller school districts may lay off employees to remain under the 50 full-time equivalent workers cut off, and others plan to not hire additional staff to remain under the threshold, Haase said.
Haase said one Omaha-area district could reduce hours for 108 part-time teacher aides, but she wouldn't name the district.
School districts in larger cities seem to be focused on cutting hours, while many smaller school districts are considering risking the penalty for not offering benefits because they don't have enough staff to reassign duties, Haase said.
"I think quite a few employees will have their hours cut, but school operations will look the same when you walk in the door," she said.
Larger employers that don't offer affordable health insurance could be fined $3,000 per employee annually if the employee opts to receive a tax credit to purchase health coverage in an insurance exchange and the costs of the premium exceed 9.5 percent of the employees' household income, said Larry Levitt a health care expert with the Kaiser Family Foundation.
Risking the penalty is an option for districts because there's a good chance the employee won't opt to receive a tax credit to buy health insurance in an exchange, Haase said. And paying the tax penalty is cheaper than offering health insurance benefits, she said.
"A lot of our clients are going to risk paying a penalty," she said. "They are gambling that none of their employees will go to the exchange."
Businesses and governments throughout the country are faced with similar choices. Virginia Gov. Bob McDonnell recently said he would limit state part-time employees to a 29-hour maximum work schedule to save the state $61 million to $110 million per year.
The National Conference of State Legislators found that about 74 percent of part-time government employees are offered health care coverage.
The part-time worker requirement likely will be less disruptive for the state of Nebraska and University of Nebraska. Both already offer health insurance benefits to employees who work more than 20 hours per week.
"That part of Obamacare doesn't affect us," said David Lechner, University of Nebraska vice president for business and finance.
Southeast Community College also offers health benefits to employees who work 30 hours or more, including adjunct professors. And Nebraska state colleges offer benefits to employees working 30 or more hours.
But Metropolitan Community College in Omaha, Nebraska's largest community college, doesn't offer benefits to part-time employees or adjunct faculty, which account for a large portion of its staff. State colleges in Chadron, Peru and Wayne offers benefits to employees working 30 or more hours, but don't offer benefits for about 300 adjuncts.
MCC's executive vice president Jim Grotrian said it is too soon to speculate how the Affordable Care Act might affect adjunct professors. He planned to have such questions answered by August, when next year's budget is being finalized.
"The affordable health care policy could have a significant impact on our institution or it could not," Grotrian said. "Hopefully we won't have to change fundamentally what we do."
Korinne Tande, the Nebraska State College System's vice chancellor for student affairs, said while an adjunct may teach less than a full-time employee, the professor may spend significant time planning classes, grading papers and consulting with students outside of class. She said the college system isn't too concerned about having to extend benefits to adjuncts because the colleges don't give adjuncts a lot of courses, so adjuncts likely aren't clocking more than 30 hours.
Southeast Community College President Jack Huck said it sounds like some employees are close to the part-time cutoffs.
"My hope would be we won't have to face those dire questions of cutting employees," he said.
Nebraska's Department of Administrative Services hasn't studied what the Affordable Care Act provision will mean to temporary and seasonal employees, said Andy Russell, the state's personnel director.
Temporary employees are tricky because they could work 20 hours one week, 35 hours the next and only during one season, Russell said. The Internal Revenue Service has said employers can average an employee's hours over a period between three and 12 months to determine if that employee is working an average of 30 hours per week.
Only 26 percent of the state's current 519 part-time employees eligible for health benefits choose to use the state's health insurance benefits. About 58 percent of 84 permanent part-timers who work more than 30 hours per week take advantage of health insurance benefits.