The township shaved back hours for some part-time workers to avoid providing insurance required under the federal health care reform law, the Asbury Park Press has learned.
The change impacts about 25 part-time employees. But that could translate to a $775,000 annual increase in the township’s health insurance costs, based on the current benefits in place now, which are about $31,000 per employee.
Starting May 1, Middletown adjusted hours for part-time employees to make sure they work, on average, less than 30 hours per week, the threshold that the Affordable Care Act considers a full-time employee.
The law, often called Obamacare, requires that employers, including schools and municipalities, offer health care coverage for these workers or face an annual penalty of anywhere from $2,000 to up to $3,000 per employee.
The so-called “employer mandate” has been delayed until 2015, but Township Administrator Anthony Mercantante said it’s not clear how far back the federal government will look at employee hours. So to stay on the safe side, the township is making the move to reduce hours now.