Chances are that you don’t have to look for very long to find articles or statistics that are critical of the health reform law signed into law by President Obama in 2010: the Patient Protection and Affordable Care Act. Here at The Motley Fool, we’ve addressed some of these criticisms head-on while also pointing out how the law could wind up benefiting millions of people while complementing parts of our existing health-care system. Regardless of how you feel, the reaction to the bill — also known as Obamacare — remains very mixed and uncertain.
What isn’t uncertain are the numerous big businesses that have been profiled in recent months for scaling back employees’ hours or flat-out cutting jobs in order to avoid having to provide health care insurance to their employees. Under the PPACA, business of 50 or more employees are required to provide health insurance for their employees, but not to necessarily kick in a subsidy to help that employee pay for their health insurance. However, if the cost of an employees’ insurance surpasses 9.5% of their income, the business can be fined $2,000 to $3,000 per employee.
Companies cutting corners… and hours
Rather than risk those penalties, businesses like Regal Entertainment, the largest operator of movie theaters in the United States, scaled back hours for thousands of employees to less than 30 per week (the level outlined by the PPACA as full-time), nullifying their chance of receiving employer-based health insurance as well as hurting them directly in their pocketbook.
As I outlined over the weekend, United Parcel Service, Inc. (NYSE:UPS) also made the rather unpopular move of announcing that it would not allow spouses for some 15,000 employees to be added to their health plans in 2014, affecting about 25% of its workforce. The move, plain as day, was made to help reduce costs by $60 million in lieu of Obamacare.
Some companies have been even more drastic with their approach to dealing with Obamacare. Medical device maker Stryker Corporation (NYSE:SYK) laid off 1,000 people, or 5% of its workforce, in order to save more than $100 million annually because of the medical device excise tax of 2.3% that it now has to pay.
Three corporate heroes
The good news is that there are some heroes mixed in with the corporate crowd — even some that have redeemed themselves — that are doing right by their existing employees and owning up to their responsibility to provide health insurance to full-, and in some cases, part-time employees.