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Affordable Healthcare Act's Impact on Part-Time Tellers



Starting on January 1st, 2015 President Barack Obama's Affordable Care Act, also known as Obamacare, will have a considerable impact on how most financial institutions (FIs) staff their branches.  If a bank or credit union has 50 or more employees that work more than 30 hours per week, they will be responsible for providing coverage that is “deemed” affordable for these workers—or they will face government penalties starting at $2,000 per person (see detailed penalties flow chart at the end of this article). With part-time employees playing a big role in most FI staffing scenarios, coupled with many of these part-timers working above the 30 hour threshold, FIs need to develop a strategy to carefully manage the scheduling of these employees to prevent costly government penalties

Historically, it has not been necessary for recruitment and retention purposes to offer health benefits to part-time employees, a perk typically reserved for full-time employees.  As a result, a significant majority of firms do not offer health benefits to their part-time employees.  According to the Henry J. Kaiser Family Foundation, only 28% of firms in 2012 offered health benefits to their part-time employees.



With so many firms not providing health benefits to their part-time employees, to comply with the new government regulation (and provide health benefits to their 30 plus hour a week part-timers) would mean a significant cost increase to their benefit expense.

The clear solution to prevent either paying benefits to part-timers or incurring the government penalty, is to put a cap on all part-time employees weekly hours at 29.  An aptly titled February 23rd Wall Street Journal article, ‘Obamacare and the 29ers,’ reviewed this topic and suggested that many retailers would pursue the 29 hour a week cap for their part-time employees.  While the concept is fairly simple, the execution of managing a part-time employee workforce with this restriction is far more complex—especially with a conventional scheduling approach.

A proven solution to enhance the branch scheduling process is to utilize FMSI’s Teller Management SystemTM, which provides an online scheduling engine to help systematically staff an entire branch network, taking into consideration forecasted transaction activity (pulled from the core system) and employee preferences.  The sophisticated program operates from simple parameters the user inputs. 
 
For example, if a branch manager requires for a certain employee to get no more than 29 hours per week, than they can simply enter this restriction.  The automated system will never again put that employee on the schedule for more than 29 hours (manual adjustments can be made after the system prepares the schedule).

Other Important Factors to Consider

Lost Income for the Employee
When considering this “29ers” approach, it is important to consider the impact of fewer hours (income) for the part-time employees.  In anticipation for firms putting hourly restrictions on their part-time workforce, a provision was added to the bill that would qualify those who earn up to four times the federal poverty level ($11,490), which is $44,680 in 2012, for a tax credit to defray the cost of health insurance, if they purchase health insurance on their own and are under the age of 65. Since having health insurance will be a federal requirement for these individuals starting in 2014, whom many do not currently have health insurance, these tax credits will help offset their new cost of health insurance, and thereby help them accept any lost income (from working fewer hours) caused by the “29ers” approach.

Submitting a Weekly Average vs. Flat Numbers

Due to the complexities of continuously fluctuating work schedules—where one week a part-time employee may work 20 hours, and the next they could work 31 hours—another important factor is whether or not an FI can submit an average.  To address this important question, an October 2012 cnsnews.com article reported, “Employers can choose a “look-back” period of between 3 and 12 months to measure if an employee has worked an average of 30 hours per week.  If an employee has worked 30 hours per week (on average) during this time, the person would count as a full-time employee for at least the next six months, regardless of how much they work.”

January 1st, 2015 is just around the corner and many banks and credit unions are still searching for the answers for the part-time teller benefits question.  With significant government penalties looming, utilizing the solutions to best handle the management of staffing, scheduling, and reporting around these regulations can result in significant cost savings for an institution.  FMSI’s Teller Management SystemTM can play a critical part in keeping part-time tellers below the 29 hour threshold, and improve overall workforce optimization.

NOTE: The qualifying period for 2015 is employment in 2014.  So employers who wait till 2015 to adopt some avoidance tactics may be too late to avoid penalties in 2015.

FMSI is currently working on an in-depth white paper about handling part-time employees as it relates to Obamacare.  Sign up for our monthly newsletter to stay informed on when this will be release.