Trends in Health Coverage for Part-Time Workers

This paper reviews recent trends in coverage for workers by part-time status and firm size. It examines data from the Census Bureau’s most recent Current Population Survey, and is designed to provide a base line for measuring future trends once the 2014 health coverage mandate in PPACA takes effect. The Patient Protection and Affordable Care Act (PPACA) enacted March 23, 2010, requires that employers with 50 or more full-time workers failing to provide health coverage to full-time workers in 2014 will be required to pay a penalty. Most of these employers already offer coverage: In 2011, 93 percent of employers with 50-199 workers offered coverage and 99 percent of employers with 200 or more workers offered it. However, not all employers offer coverage to part-time workers: In 2011, 15 percent of employers with 3-199 workers offered coverage to part-time workers, and 42 percent of employers with 200 or more workers offered it to part-time workers. Since 1999, there has been no clear trend away from offering coverage to part-time workers either among small or large employers, but between 2009 and 2011 small employers offering health coverage to part-time workers declined from 30 percent to 15 percent. While many employers already offer health coverage, there are other provisions of the PPACA that are expected to increase the cost of coverage. As a result, there is concern that employers may respond by cutting back on health coverage for part-time workers or by increasing the proportion of part-time workers employed, the latter of which has already been seen recently. The recent recession has already resulted in an increased use of part-time workers, fewer employers are offering health coverage to part-time workers, and there has been a slight drop in the percentage of part-time workers with coverage from their own employer. While employers with under 50 workers are not subject to the penalty if they do not provide health coverage, they may also drop coverage for part-time workers as a way to compensate for any cost increases. The PDF for the above title, published in the March 2012 issue of EBRI Notes, also contains the fulltext of another March 2012 EBRI Notes article abstracted on SSRN: “Modifying the Federal Tax Treatment of 401(k) Plan Contributions: Projected Impact on Participant Account Balances.”