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Q. I'm confused about CEOs claiming that Obamacare will force them to reduce employees' hours due to the cost of insuring them. Aren't large employers already obligated to provide health insurance to full-time employees?
A They are not, but almost all of them do anyway. That's especially true of companies that employ full-time, higher-paid, skilled workers, who otherwise might balk at taking the job. What you've probably been reading about in the media are threats by companies, such as restaurants and retail chains, that employ a lot of lower wage and part-time employees. A much smaller percentage of those companies offer health insurance, and when they do, it may be a plan with benefits that top out at only a few thousand dollars a year.
But as of 2014, companies with more than 50 full-time employees (defined as employed an average of 30 hours a week or more) will face a choice. If they don't offer adequate health coverage and even one of their full-time employees gets a subsidy to buy individual coverage on a state exchange (a likely prospect) they'll be hit with an annual penalty of $2,000 per full-time worker, with the first 30 workers excluded. So, for instance, a company with 400 employees would owe an assessable payment of 370 times $2,000, for a total of $740,000.
One way for a company to dodge the requirement would be to make sure its low-wage, unskilled employees work fewer than 30 hours a week, a tactic that some employers already use to hold down the numbers of workers who get health coverage. But even if that happens, those low-paid employees will, for the first time in 2014, have access to good insurance they can afford through other provisions of the Affordable Care Act.
For more information, see our Health Insurance Buying Guide as well as rankings of health insurance plans.
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