Affordable Care Act could challenge NC budget

Posted March 7, 2014

— State agencies are trying to determine how best to meet the Affordable Care Act mandate to begin providing health coverage to all employees who work 30 hours or more each week without breaking their budgets.

According to state records, about 8,350 non-permanent employees in state government meet the threshold for coverage but don't qualify for the State Health Plan, meaning North Carolina would have to pay for some sort of health insurance for them under the federal health care law.

With a $5,400 average cost state employee health insurance, that would bring the potential cost to the state to about $45 million.

"It's one reason we're asking every department that reports to me and every department throughout the state to give us several scenarios because we don't know the (budget) forecast, primarily because of the health care act," Gov. Pat McCrory said.

Agencies could curtail work hours to move employees under the 30-hour weekly trigger for health coverage, officials said.

"Large employers of all types are having these conversations," said Don Taylor, an associate professor of public policy at Duke University.

The University of North Carolina system is forecasting an even larger budget hit from the health care law, at more than $46 million.

Under the law, businesses with more than 100 employees must offer coverage to 70 percent of their full-time employees in 2015 and 95 percent in 2016. Employers have to certify that they didn't lay anyone off to avoid providing coverage.

Taylor said managers must first determine how many of the non-permanent employees may be on their spouses' insurance, which could lessen the impact.

Cutting back on work schedules could hurt both workers and customer service, he said.

"It's not so simple just to say you're never going to be able to work more than 29 hours a week because somebody's got to be working," he said.

Large businesses have to pay an Employer Shared Responsibility penalty of $2,000 per uninsured employee after the first 30 employees, as well as a fee for employees who receive a subsidy through the online health exchanges.

Taylor said he thinks President Barack Obama's administration will eventually compromise on the penalty to lessen the burden of the law.

"I think the discussion is important, but I suspect the big sword hanging over everyone's head doesn't ever drop," he said.


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  • glarg Mar 10, 2014

    "Unless, of course, the ACA coverage is more affordable."

    The ship has sailed on that talking point.

  • Kenny Dunn Mar 10, 2014
    user avatar

    These workers should be covered under the existing state system. That would take care of the problem and how it should have been all along. Unless, of course, the ACA coverage is more affordable.

  • veryfrustrated1 Mar 10, 2014

    Did anyone really believe obama and the lefties when they said that it would cost $2500.00 less per family to provide 30 million more people with "free healthcare"?!!!!! If it sounds to good to be true..................................

  • Fanny Chmelar Mar 10, 2014
    user avatar

    View quoted thread

    The administration with its head in the sand sure does seem to be surprised by something that everyone saw coming years back....

  • birdwatcher Mar 10, 2014

    These are not constructive comments. When we stop sniping at each other and blaming the administration for trying to help people, then we might be able to start problem solving. Admit there is good about the law. Admit there are problems. Work to fix the problems. Seems simple.

  • br549znc Mar 10, 2014

    I guess even after they passed it they didn't read it.

  • Hope Lives Mar 10, 2014
    user avatar

    Why is this news? Anyone with a bit of common sense and logic could have told you this!! So I guess people will stop criticizing the "evil greedy businesses" for cutting their workforce and reducing hours? Even the good ole' state government isn't immune! What a disaster....

  • findoutthefacts Mar 10, 2014

    I love how WRAL downplays devastating policies that the democrats/liberals endorse. Getting hit with a $45+ million dollar bill is a lot more than just "challenging".

  • glarg Mar 10, 2014

    ""Large employers of all types are having these conversations," said Don Taylor, an associate professor of public policy at Duke University."

    "With a $5,400 average cost state employee health insurance, that would bring the potential cost to the state to about $45 million."

    Lets see.... 2 + 2 = ?

    Its costs you $5400 to have an Obamacare policy. It costs you $2200 to discontinue insurance entirely.

    Which way does the incentive work in this system?

    The administration was warned about this mathematics back in 2009 but they choose to ignore everyone and everything in their insane march to pass something, anything.

  • veryfrustrated1 Mar 10, 2014

    View quoted thread

    IF a political party was trying to pass a law that had the potential to unjustly financially ruin you, I would hope that you too would have the good sense to fight tooth and nail against it. And don't worry about the insurance companies. According to the original lefty plan, insurance companies jumped in bed with obamacare initially. Now that it is becoming ever increasingly obvious that an inadequate number of healthy people are signing up (as expected), it will not be long before this pyramid plan collapses under its own weight, taking down the insurance companies with it. Socialized medicine here we come!!!!!!