Last week, Universal Resorts in Orlando announced they would drop health coverage for their part-time employees next year, preferring to pay the penalties imposed under the Affordable Care Act.
Universal offers minimum coverage plans for their part-time workers which would no longer be permitted under the new law. The company said only about 500 of the over 17,000 employees were enrolled in the plans that critics say offer minimal coverage with low pay-outs insufficient to pay hospital bills.
Darden Restaurants also announced they would drop a similar coverage option for their part-time workers. In December, Frontier Communications CEO Maggie Wilderotter told Bloomberg News it was her “fiduciary responsibility” to consider dropping health benefits for the company’s 15,000 plus employees.
Employers who previously offered health care and decide to discontinue coverage will likely encounter backlashes from their workforces, warned John Challenger, CEO of Challenger, Gray & Christmas, Inc. Last November, John Schnatter, founder and CEO of pizza chain Papa John’s, underwent scrutiny after suggesting companies would find loop holes to get out of covering their workers. He has since stated he would continue to offer coverage to his corporate workers.
“The law will likely be particularly difficult for the retail and hospitality industries where workers are part-time and hourly,” added Challenger. “Companies will have to grapple with incurring the costs or passing it on to consumers or employees.”
What other impact could the health law have on future workforce? How are companies dealing with the new law? How is this being handled at your company or affecting you personally? Comment below.
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