BUSINESS
04/13/2013 03:09 pm ET | Updated Apr 22, 2013

Most Employers Won't Drop Health Care Coverage Because Of Obamacare: Survey

Despite speculation indicating otherwise, most employers don’t plan to drop workers from their healthcare plans as a result of Obamacare, a new survey finds.

Nearly 70 percent of benefit professionals said their companies “definitely will” keep offering coverage to full-time workers next year, when many of the provisions of President Obama’s healthcare reform law take effect, according to a recent survey from the International Foundation of Employee Benefit Plans. Just one percent of the respondents said their companies definitely wouldn’t be offering health care coverage to full-time workers and two percent said it was “somewhat unlikely.”

The share of employers saying they would “definitely offer” coverage to full-time workers is up from last year, when only 46 percent said they would do so in a similar survey.

Obama’s Affordable Care Act requires companies with 50 or more workers to provide healthcare coverage for their employees or face a financial penalty. Some critics have argued that the law may force employers to cut workers’ hours or drop them from their plans and pay the fine.

Dave Dillon, the CEO of the Kroger grocery chain, told the Financial Times in February that while his company plans to continue to insure full-time employees under Obamacare, others may not. “If you look through the economics of the penalty the companies pay versus the cost to provide coverage, the penalty’s too low, or the cost of coverage is too high, or the combination is wrong,” he said.

Other companies have experimented with cutting workers’ hours or hiring more part-time employees to decrease the cost of coverage. Darden Restaurants, the parent company of Olive Garden and Red Lobster, hired more part-time workers last year as part of a test plan aimed at limiting healthcare costs. Darden ultimately backed off of the test, which was met with negative backlash.

Some, like the owner of several Wendy’s franchises in Nebraska, went even further. Gary Burdette, an executive at the company the owns the franchises, said in January that the company would reduce hundreds of workers’ schedules to 28 hours per week.

Still, those businesses seem to be outliers. Nearly 90 percent of employers don’t plan to shift full-time workers to part-time status as a result of Obamacare, a recent survey from the Minneapolis Federal Reserve found.

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