When the Affordable Care Act, also known as Obamacare, first passed, many speculated that there would be an increase in part-time employment. By reducing the work hours of existing full-time employees, or by increasing the number of part-time employees hired, employers could avoid ACA’s mandate that they must offer health insurance to all full-time employees.
To briefly recap, the Affordable Care Act provision for employer shared responsibility required that starting January 1, 2015, large firms (those with 100 or more full-time equivalent or FTE employees) must offer affordable health insurance to their full-time workers (people working 30 or more hours per week) or pay a penalty.
Implementation of the mandate was postponed until 2016 for midsize companies (those with 50–99 FTE employees). Small firms (those with 49 or fewer FTE employees) are exempt from the mandate.
Some experts were certain that within a few years of ACA passing, we’d find increases in employment just below the 30 hour threshold. They also guessed that the ACA, by expanding access to means-tested public and publicly subsidized coverage, would create work disincentives. Changes in incentives for part-time employment might be particularly strong in jobs where full-time employment confers eligibility for employer-sponsored insurance, given that this eligibility generally makes workers ineligible for subsidized Marketplace coverage.
But according to a study published in the January 2016 issue of Health Affairs by Asako Moriya et al, the opposite has happened. Instead of the expected increase in part-time employment, between 2012 and 2015 the researchers found a slight downward trend in working 25-29 hours per week among employees of large firms.
“When we look at the whole workforce, we can say with a large degree of confidence that there is nothing nationwide that supports a claim that the so-called employer mandate or other Obamacare features have led to increases in part-time employment at the expense of full-time jobs,” Kosali Simon, a professor at Indiana University and a co-author of the study, told CNBC.
There were a few interesting exceptions. Among workers of low educational attainment (i.e. high school degree or less) and workers ages 60-64, there was a modest .5 percent increase in part-time employment. However, the researchers do not attribute these subgroup increases to the Obamacare employer mandate, but rather to the ACA’s offer of subsidies to buy health insurance through Obamacare exchanges and the increased availability of Medicaid benefits for poor adults.