8 local and state governments that are cutting workers’ hours and wages due to Obamacare

Katie LaPotin & Laura Byrne, Red Alert Politics, June 20, 2013

It isn’t just the private sector taking a hit from Obamacare. As employers prepare for the full impact of President Obama’s Affordable Care Act in 2014, many local and state government agencies are being forced to shed staff or cut workers’ hours and paychecks to stay afloat.

Here are eight examples of places across the country that will be making cuts because of Obamacare.

1. Kansas

Kansas State Flag

According to state officials, the new fees associated with President Obama’s healthcare law will cost the state at least $4.7 million in 2014 – or about $63 per worker – in addition to the costs of the new law’s coverage requirements being absorbed by the plan.

This is especially dangerous to school districts in rural parts of the state, forcing some to consider looking at other options including not providing healthcare to its employees.

“A lot of the districts and co-ops are looking at various options, including the option of getting out of offering health insurance and acknowledging that the most economical step for them is to pay the penalty and have their employees go to the exchange and get what’s available through the marketplace. But a lot have not made that decision yet,” David Shriver, the assistant executive director for insurance services at the Kansas Association of School Boards, told Kansas Health Institute News.

2. Dearborn, Michigan

Dearborn, Michigan

The city is cutting more than 700 part-time and seasonal workers’ hours down to 28 hours a week to avoid paying for their healthcare coverage.

“If we had to provide health care and other benefits to all of our employees, the burden on the city would be tremendous,” Deerborn Mayor John O’Reilly told Patch.com.

3. Indiana

Indiana State Flag

Several school districts throughout the Hoosier state are cutting back staff and hours because of the new law.

“What I’m seeing across the state is school districts, unfortunately, having to reduce the hours that they are having some of their folks work, primarily so they don’t have to worry about about the penalties, or they don’t have to provide them health insurance, which would be very, very costly,” Dennis Costerison, the executive director of the Indiana Association of School Business Officials, told The Indianapolis Star.

4. Omaha, Nebraska

Omaha, Nebraska

A school district just outside the city is reducing its hours for as many as 281 part-time employees to avoid paying the $2.5 million in new costs forced by the law, while the Millard School District figures Obamacare will raise its costs by $400,000.

“The biggest problem is everyone said that ObamaCare is only going to help cut costs. Nothing could be further from the truth,” Mike Kennedy, who serves on the board of Millard Public Schools, told the Omaha World-Herald.

5. Long Beach, California

Long Beach California

The coastal city will be cutting hours for 200 of its part-time workers so that it doesn’t have to pay an additional $2 million in health benefits under the law.

“We are in the same boat as many employers,” Tom Modica, Long Beach’s director of government affairs, told the Los Angeles Times. “We need to maintain the programs and service levels we have now.” So the city is going to cut hours for 200 part-time workers so it doesn’t have to pay $2 million to provide health benefits.

6.Salt Lake City

Salt Lake City

According to Granite School District spokesman Ben Horsley, the suburban Salt Lake City school system will need to cut the hours of approximately 1,000 employees to 29 hours a week to avoid paying for their insurance.


Virginia capitol

The Virginia General Assembly, under a directive from Gov. Bob McDonnell (R), passed a law earlier this year preventing part-time employees in the state from working more than 29-hour work weeks, even if they’ve worked 40-hour weeks in the past.

“That law is now in effect and it requires actions such as this one,” Paul Logan, a spokesman for McDonnell, told CBS Richmond. “The Commonwealth of Virginia is grappling with the same issues that many businesses in the private sector are as they struggle to deal with the costs imposed by the Affordable Care Act.”


Gov. Rick Perry

In this case, everything is not bigger and better in Texas. Several school districts in the Dallas-Fort Worth area will be cutting hours and slashing wages for employees to comply with the new laws, as well as passing some of the cost onto full-time employees.

“The Affordable Care Act has added so much complexity and administrative burden that there is nothing affordable about it,” said Jared Pope, a business consultant who has given presentations on the law at Texas Municipal League conferences, told The Dallas Morning News.

h/t Investor’s Business Daily


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