Should You Offer Health Benefits to Part-Timers?
by Mark Henricks
Nearly one in four part-time workers can get health insurance through their employers, according to a 2015 report by the Bureau of Labor Statistics. While that's less than the roughly six of seven full-time employees with access to company health plans, it does indicate that many employers see value in providing health insurance to part-time workers.
Employers offer part-timers health insurance primarily to be competitive in the labor market, attracting and retaining high value employees with a health benefits plan. Other reasons include having healthier and more productive employees and reducing absenteeism with healthier workers, which can end up saving employers money.
Another way a business may be able to save is by having more employees who are insured because adding more employees to the pool of the insured increases the amount of premiums workers pay for coverage.
Still, employers are cautious about adding part-timers to health plans. One reason is that cost-saving benefits accrue most swiftly to large employers, especially those that are self-insured.
Another factor is the importance of part-timers to the organization. Businesses with part-time employees that are more skilled than average can be more likely to succeed by reducing turnover. Companies with part-timers that are easily replaced are less likely to offer part-time health benefits.
Employers tailor part-time health plan offerings in several ways to control costs and maximize advantages. For instance, many require part-timers to go through 90-day probation periods before becoming eligible for health coverage. Others offer insurance only to employees working a minimum number of hours per week.
Though employers may not be able to offer multiple types of plans, the amount employees pay often differs. Part-time plans tend to require employees to pay the full price of the coverage.
The Affordable Care Act, in addition to mandating employer-offered coverage for those working 30 or more hours per week, required the creation of health exchanges where people can purchase individual insurance. Part-timers may be better off purchasing coverage through those exchanges than paying for employer-sponsored plans, Fronstin said. And exchange plans can be maintained when an employee switches jobs, he noted. Also, low-paid employees may save more money by paying for an exchange plan and taking the tax credit than by paying for an employer-sponsored plan that doesn't offer a tax credit.
It's not clear whether part-time benefits are becoming more common or less common, or which way the trend will go in the future. That's partly because of the interplay between unemployment and the still-developing implementation of the ACA. Lower unemployment tends to encourage employers to offer benefits, while the ACA may encourage more part-time employees to use the health exchanges.
But with unemployment at a low, employers who want to be competitive are likely to keep their part-time health benefits.
About This Author
Mark Henricks is a freelance journalist covering business, entrepreneurship, technology, personal finance, health and fitness for leading publications.
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