Affordable Care Act could challenge NC budget

Posted March 7, 2014 6:22 p.m. EST
Updated March 7, 2014 6:55 p.m. EST

— 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.