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AFT seeks anti-abuse measures in healthcare law

Employers should not be allowed to use the implementation of the Affordable Care Act as an opportunity to justify reducing employees' hours or engage in other behaviors that hurt vulnerable workers, the AFT told the U.S. Treasury Department at a hearing on April 23. The IRS is in the process of drafting final regulations for the law as it approaches the 2014 implementation date.

Testifying on behalf of the AFT, research and strategic initiatives associate Amy Clary outlined important protections and clarifications the AFT's members and healthcare benefit experts would like to see in the regulations. These include:

  • Family coverage should be affordable. The premium tax credits available on the exchanges should provide relief for families struggling to pay very high premiums for employer-sponsored health coverage. How the Treasury Department determines affordability should be based on the share employees actually pay for themselves and their families, not just the amount the employer puts in for individual coverage.     
  • Employees working on a school year calendar need special considerations in determining average work hours. The AFT supports the employment-break-period averaging method for those working in educational organizations.     
  • Since employers are already pivoting to reduce their financial obligations under the ACA, regulations should include anti-abuse language to prevent bad employer behavior, such as reducing employees' hours to avoid paying penalties when their employees seek benefits on the exchanges. This is a concern to many AFT members, including school support staff, healthcare workers and public employees.

Special protections needed for contingent faculty The problem of bad employer behavior has come to light especially with adjunct or part-time faculty. In the past year, a growing number of colleges and universities, unclear about how full-time workers and part-time workers would be defined under the law, have cut the hours of their contingent employees.

Starting in 2014, the Affordable Care Act levies penalties against large employers who do not offer affordable insurance coverage to their full-time employees. The act defines a "full-time" employee as one who is employed on average at least 30 hours per week. The penalties apply when a full-time employee receives a subsidy to buy insurance in a state's exchange. Determining who is full-time and who is part-time will involve a three- to 12-month look-back period to 2013, which is why employers are moving precipitously in 2013 and, in some cases, even sent out reduction notices before the fall semester of 2012 had ended.

On Jan. 2, Treasury published some guidance in the Federal Register, indicating that colleges should use a "reasonable method for crediting hours of service." In her testimony, Clary noted that the AFT applauds the ACA preamble's acknowledgment of the special circumstances of adjunct faculty and welcomes the recognition that contingent faculty's duties extend beyond the classroom. However, the AFT calls for more regulatory action, including codifying anti-abuse provisions and penalties for violators in the final rule.

"Contingent faculty members must be treated as professionals," Clary said. "Colleges and universities must not be permitted to reduce contingent faculty course loads and shirk the responsibility of providing health coverage under the guise of complying with the ACA." [Barbara McKenna]

April 25, 2013