Is Long Beach really limiting the hours of 1,600 workers because of ‘Obamacare’?

at 06:00 AM ET, 05/06/2013


(Alex Wong/GETTY IMAGES)

“Even the city of Long Beach, California came out and said that for their part-time workers -- there’s 1,600 of them -- they’re going to get all of them lower than 30 hours per week so that then the city doesn’t have to provide expensive health insurance.”

--Sen. John Barrasso (R-Wy.), on MSNBC’s “Morning Joe,” May 3, 2013

“And now the city of Long Beach, California did the same thing with their 1,600 part-time employees. They’re saying we’re going to keep all of you under 30 hours because we can’t afford the expensive mandates of President Obama’s health care law.”

--Barrasso, on Fox News, May 3

“The city of Long Beach, California, told their 1600 part-time workers that they were going to cut them back to 27 hours on average, so that they are not over that 30-hour level.”

--Barrasso, on Fox Business News, May 3

Just one day after the Los Angeles Times published an article titled “Part-timers to lose pay amid health act’s new math,” one of its factoids became a frequently-mentioned talking point for Republicans. Indeed, the Republican National Committee “War Room” e-mailed the article to subscribers on its listserve the morning it was published.

Barrasso, chairman of the Senate Republican Policy Committee, then mentioned the Long Beach saga on just about every news show he visited Friday, in an effort to make the case that President Obama’s health care law is hurting the economy.

Certainly employers are trying to figure out how they are impacted by the new law, but in general politicians should be careful about drawing policy implications from anecdotes. Already, in fact, some employers, such as Darden Restaurants Inc., have pulled back from cutting hours because of a public backlash that affected sales. No one can really judge what employers do or do not do until there is some hard data after the law has been implemented.

But we were curious about what’s going on in Long Beach because the Times article was a bit contradictory.

The Facts

Barrasso’s talking point is drawn pretty clearly from a line high up in the article: “Consider the city of Long Beach. It is limiting most of its 1,600 part-time employees to fewer than 27 hours a week, on average.” But lower down in the article, there is this sentence: “The city estimates about 200 part-time workers will be among the most affected by a reduction in hours, representing about 13% of its overall part-time staff.”

So, which is it? Do 1,600 or 200 actually get their hours cut? There’s a big difference there.

Tom Modica, director of government affairs and strategic initiatives for Long Beach, says the right answer is less than 200.

In fact, it turns out that the “200” number refers to the number of employees who will experience any sort of change—either ending up fewer hours or obtaining full healthcare coverage.

“We have not made any blanket statements reducing everyone’s hours,” he said. “We are in the process of building our budget for the next fiscal year, and have informed departments that they need to bear in mind that the Affordable Care Act will require certain part-time employees to have health care.”

Here’s what that means in terms of raw numbers.

Long Beach has 4,064 full-time workers and 1,593 part-time employees. The full-time workers already receive health care. All but about 125 part-time workers—92 percent—are seasonal and temporary employees, so most already work fewer than 30 hours a week.

Permanent part-time workers actually get a health stipend now. If they work 30 hours or more, that stipend will be converted to full medical coverage once the health care law kicks in. So they would actually benefit from the law.

“Most of those permanent part-time employees currently work more than 1600 hours a year (about 30 hours a week) but I don’t have exact numbers today,” Modica said. “If they continue to work 30 hours per week they would get health insurance per the Act.”

In essence, 1,400 of the nearly 1,600 part-time workers will have no change in their hours or their health care. But a portion of the remaining 200 will see a decrease in hours, because otherwise the city would have to provide them with health care. If all 200 workers received health care, then it would increase expenses by $2 million, forcing cuts in other areas, Modica said.

Modica said there is no estimate yet about what percentage of the 200 would receive health care, as the budget is still being developed.

But he emphasized that “there is not a set limit” of hours a person can work. “Some part-time staff may work more than 1,400 a year, depending on staffing needs and the ability to run the program within current resources, and others will work below this amount.”

Moreover, even those workers who end up with fewer hours will still end up with health care. It might even be cheaper than getting it through the city of Long Beach. As the Times article noted:

“One consolation for part-timers is that many of them stand to benefit the most from the healthcare law’s federal premium subsidies or an expansion of Medicaid, both starting in January. The law will require most Americans to buy health insurance or pay a penalty. Yet many lower-income people will qualify for government insurance or be eligible for discounted premiums on private policies.”

“We’ve reviewed the senator’s statements and the article and we believe his statements reflect the information included in the LA Times story,” said Barrasso spokeswoman Emily Lawrimore.

The Pinocchio Test

We do not doubt that employers now are calculating how the health care law affects their bottom line—and certainly some employees will lose out. But one anecdote—or even a few—does not really say much at this point.

Still, given how the Times article was framed, we can understand why there might be confusion about Long Beach’s plans.

So we’re not going to award any Pinocchios in this instance, except to offer this piece of advice to Barrasso and other politicians: Before rushing on TV with a new talking point, read to the bottom of the article.

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    About the Blogger

    Glenn Kessler has covered foreign policy, economic policy, the White House, Congress, politics, airline safety and Wall Street.

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