Unintended Consequences or “LOOPHOLE! LOOPHOLE!”

Fort Wayne, IN public school to cut part-timer’s hours in order to avoid Obamacare penalties:

Fort Wayne Community Schools is trimming the hours of more than 600 part-time teaching aides and cafeteria workers in anticipation of a projected budget shortfall and to satisfy the requirements of the federal health care law, a school official said.

Kathy Friend, chief financial officer for FWCS, said the school district is dropping 610 employees from 30 hours to 25 hours per week starting June 3, rather than provide them with health insurance as mandated by impending federal regulations. Offering all of the district’s 840 part-time employees health insurance would have cost $10 million, a price the district cannot afford, she said.

Friend said the decision to cut hours was also driven by the expectation that FWCS will have a tighter budget in 2015.

“We have to make the decision we’re making because of a budget situation, and we really have to make it because of the insurance issue,” she said.

“There’s not an easy answer to this problem.”

Beginning in January 2014, the Patient Protection and Affordable Care Act, known as Obamacare, will require employers with at least 50 full-time employees to offer health insurance to employees who work at least 30 hours per week.

“This is not just an FWCS problem,” Friend said. “It’s something that almost all employers with part-time employees are trying to resolve.”

The school district’s penalty for not providing health insurance to legally entitled workers would have been $2,000 for every one of its roughly 4,000 employees, regardless of how many hours they work. This was a price the district was not prepared to pay.

“We didn’t think it would be wise to spend $8 million and get nothing in return for it,” Friend said.

Who saw that coming?

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