CA schools flunking Obamacare preparation

Obamacare Cagle Mckee, June 14, 2013June 17, 2013

By Evelyn B. Stacey

The implementation of the Affordable Care Act — Obamacare — isn’t just hitting private businesses. Governments also must comply.

Starting January 1, 2014, California school districts with 50 or more full time employees must provide complete health care coverage. After contacting numerous California agencies, organizations and school districts, I found that little fiscal data are available on the potential costs schools or individuals will have to bear.

“Our Education and Health sections are not aware of any reports or analysis that look at the Affordable Care Act from the perspective of how schools might be affected,” said Jennifer Kuhn, deputy legislative analyst in education in the Legislative Analyst’s Office, in an email.

“I don’t know of anyone in our department monitoring ACA impacts,” said Carol Bingham, the senior fiscal policy adviser for the California’s Department of Education.

According to the National Education Association, their research folks do not track that data. “I am not even sure where to point you,” said Staci Maiers, the NEA’s senior press officer.

‘Full time employees’

However, one of the most notable changes school district officials are discovering is the new definition for “full-time employees” now is: those who work an average of 30 hours per week, instead of less than 40 hours per week.

Most part time or classified employees with California schools have contracts already stating that 30 hours a week qualifies an employee for insurance. Yet the result of the new Obamacare provision could still cause school districts higher than expected costs. Or individual employees could see a considerable drop in hours they can work.

“We already have it written in their contract that part-time employees only get benefits if they work over 30 hours per week,” John Paul Wells told me; he is chief budget officer of Holtville Unified School District in Imperial Valley.  “So, basically, we already set the cutoff in our contract which complies with the requirement of the new law. We already limit hours for new hires so that we don’t pay benefits. We will have to be very vigilant to make sure part-time staff does not work more than 30 hours. Basically, this will be more work for the payroll department.”

If a school district does not watch hours closely, the increased cost of coverage could be substantial. For instance, the Los Angeles Unified School District employs 34,936 classified employees.

When I contacted the LAUSD human resource department to get an estimate of the actual cost, their staff said they were uninformed and to contact the Superintendent John Deasy. He has not responded to my repeated calls.

Utah’s Granite School District, on the other hand, was one of the first districts to send out letters to their part-time employees notifying them of their hours reduced to 29 or less per week. “The cost of benefits for individuals and families ranges from around $11,000 to $14,000,” Ben Horsley, director of communications and outreach for Granite School District, wrote me in an email. Since Granite has nearly 1,200 part-time hourly employees, that would be about $14 million extra to provide them with benefits.

“What has become apparent is that this law will be a job-killer for hard working Americans, resulting in an alarming trend of both fewer jobs and shifting workers from full-time to part-time,” said Rep. Buck McKeon, R-Calif., in an email.

Covered California

However, California is one of the first states to get the health insurance exchange system, known as Covered California, nearly set up. The California School Employees Association reported the rates announced by Covered California for individuals. The lowest is $304 per month in the Los Angeles region. According to Covered California, rates will change region by region.

Thus, if classified employees are not covered by their employer, they will be looking to purchase individual insurance. According to The Salt Lake Tribune, the Utah School Employees Association  believes these changes would hurt the district by attracting less qualified workers to the positions.

However, according to Horsley, “If we are required to provide them with benefits, services at schools would be impacted and the board would have to decide how to pay for those benefits. That situation would require some layoffs.”

“For the most part, none of these part time employees was ever offered medical insurance as part of their benefit package before ACA,” said Susen Zobel, president of the Granite Education Association in Salt Lake City. “They were allowed to work more hours, some working 32-plus hours as they chose. The only realistic choice for our district and other employers given for this employee group was to cut the number of hours they were able to work. This is such a hardship because they would like to work more hours and have offered to waive medical insurance because often they have it through the other spouse. But that is not allowed under the ACA.”


The change in part time hours is not the only cause for concern. “The scariest part schools are talking about is substitutes and how they will be counted,” said Wells.

Moreover, this would create a challenge for how contract or temporary employees are counted and covered.

Another conundrum: substitutes that work for more than one school district, but cumulatively put in 30 or more hours. It is unanswered who is to pay for the substitute’s benefits as the substitute, according to the law so far, is also counted as an employee for each district.

In a March letter, the National School Boards Association asked for clarity on this and other specific provisions:

“This language is both problematic and unfair for school districts, as it has the potential to result in school districts not hiring individuals for long-term substitute assignments, and instead breaking up the assignment into a series of assignments of a short-term duration … resulting in a lack of continuity in teaching methodologies for students and even the assignment of less qualified teaching staff which could ultimately affect students’ educational outcomes.”

Wells said, “Substitutes’ hours will have to be tracked and we may have to take averages for work periods. We are going to be responsible for a lot of paper work.”

Down Mexico way

Another concern is alternative insurance. “We have a different system since being so close to the border” with Mexico, Wells said. “We are able to offer a number of employees coverage through Mexico’s health insurance. Which many employees prefer since it is much cheaper. I’ve had individuals come into my office in tears, saying it is the first time they were able to include their children on their insurance. I’ve been told that offering Mexico’s health care insurance does not qualify as care to the IRS,” which will be administrating major parts of Obamacare. “Every region is different and cannot all be treated the same.”

Kuhn added, “It is hard to say how the ACA implementation could play across the broader economy and affect health premiums, which could in turn affect large employers such as schools.”

“How employers, employees and the government are going to effectively monitor or track this monstrosity is beyond me,” Wells warned. “I have a feeling that, no matter what we do, we will eventually get penalized for something, because implementing this is just too complex and we won’t even know when we are violating provisions of the law.”

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