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A new cost of Obamacare for college staff: Hours cut to dodge insurance costs

12:00 pm by | 0 Comments

cost of Obamacare

Rich Herdegen is already feeling the pinch of federal health care reform.

Herdegen, who is disabled and faces massive medical bills from his wife's long battle with cancer before her death, relies on his salary as an adjunct instructor in economics at Georgia Military College's Augusta campus. But this quarter his hours have been cut, costing him about $2,000, he said.

"That's a lot of money," Herdegen said.

The cut in hours has happened to a number of adjunct or part-time faculty at the college, in part because the school is moving on what it considered good advice to comply now with requirements of the Affordable Care Act, a move that might actually be premature. Even experts in academic human resources say there is "general confusion" about the act's implementation and impact.

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At issue is the 30-hour per week rule that would make an employee count as full time under the Affordable Care Act and require a large employer to offer them insurance -- what is commonly called the employer mandate.

In July, the Obama administration decided suddenly to delay that requirement one year, from 2014 to 2015, along with the penalties for not providing insurance for employees who then get a subsidy to get coverage through the Health Insurance Marketplaces.

But Georgia Military College had already begun taking steps before that to limit faculty hours based on advice it received from professional associations that the Internal Revenue Service would make colleges count an additional hour of preparation for every classroom hour taught, which could push some part-time faculty past the 30-hour mark, said Mark Strom, director of human resources for Georgia Military College. The college has to plan months ahead to know who is going to teach what course, he said.

"It's not like we can wait up until a quarter starts to make a decision," Strom said. So, he advised the various campus directors around the state to begin weighing hours that way and to curb if necessary those who might qualify as full time. Each employee on the health plan costs the college $7,155 and that will go to $9,000 for family coverage next July, Strom said.

"It would not take many of those to really create a financial issue for our annual business plan," he said. "We're doing the best we can in a very tough market. Higher education has become very competitive."

Any extra expense would have to be covered by either enrollment or tuition increases, Strom said.

But the advice the college was following was wrong. The College and University Professional Association for Human Resources and some other higher education groups met with the IRS last year and in the spring to talk about this and other issues, said President and CEO Andy Brantley.

It was "to bring to their attention some of the particular challenges associated not just with higher education but with part-time employees in general," he said. So far, the IRS has not responded, Brantley said.

"There is no specific guidance from the Internal Revenue Service at this point in time that gives us the specific information we need as employers to determine next steps," he said. Colleges and universities should be prepared to deal with the issue and should be looking at the issue, Brantley said, "but making a formal decision at this point in time is not necessary to be in compliance with the Affordable Care Act."

Nor is Georgia Military College alone in acting now -- a survey by the academic HR group found a quarter of schools had already made a decision on how they will calculate part-time hours and two-thirds are working on it, Brantley said. But his advice was, "Until we have more specific guidance I would encourage colleges and universities to consider whether or not they choose to move forward."

Jim Brady teaches communications at Georgia Regents University and as an adjunct at Georgia Military College. The drop in hours has him wondering how he will meet all of his bills.

"Somebody is not going to get paid because the money will not be there," he said.

Strom said he only recently saw that the college will not have to begin calculating the hours and complying with the Affordable Care Act requirements this year, but even if the school changed rules now it might just be forced to change back again next year.

"We're going to hold the line on that," he said. Strom urged directors to be flexible and work with adjuncts on how those hours are managed.

"The last thing we want to do is lose good part-time faculty that have worked with us for a while," he said.

Every day now, Strom said, he is looking for information on how and when different aspects of the new law will kick in.

"In my 26 years of doing human resources, this is the most complex law and the most confusing implementation of any major law that I have seen at the federal level," he said.

Brantley said he can sympathize with that confusion.

"I don't fault that institution or that HR person at all," he said. ___

[Photo courtesy of Flickr user Fibonacci Blue]

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