Working poor victims of ACA cracks: Report

December 27, 2015

A USA Today examination of the impacts the ACA has on the working poor - especially in the 20 states that haven't expanded Medicaid - says millions have fallen through the cracks without insurance from their employers, the money to buy it themselves or the safety net from Medicaid. The report finds:

  • Companies are increasingly using contract workers for whom they're not required to provide insurance so they can avoid rising health care costs. State and local governments are also contracting out more jobs to small businesses that are not required to provide coverage for their workers;
  • Surveys show up to 20% of businesses have cut or plan to cut workers' hours to avoid paying for health benefits. Employees often say their hours are clearly kept right below the 30 hours needed for them to qualify for health insurance. The companies can cite downsizing or restructuring as the explanation that prevents the cuts from being a violation of labor laws;
  • Large corporations with a lot of minimum-wage workers, including fast food restaurants, often leave insurance decisions up to franchisees, who only have to offer insurance if they have 100 employees (a number that is dropping to 50 as of Jan.1). That means the lowest-paid employees do not receive the benefits given to workers in the corporate offices; and
  • Many employers offer coverage that's affordable only by the letter of the law - which says the monthly contribution for individual coverage can't be more than 9.5% of annual household income - but in reality is too expensive for people earning near-poverty wages.

There are also proposals to change the law so that it includes more "gig" workers. One proposal would overhaul labor laws to make the ACA fairer to independent workers. One concern is that employers of independent contractors or freelancers have a competitive advantage over traditional employers who offer benefits and would have to pay a penalty if they didn't offer insurance and have more than 50 workers.