Health Care Law Forces Universal Orlando to Cut Part-Time Health Insurance

Feb 20, 2013

Photographer: Matt Stroshane/Bloomberg.

On health care coverage, 2013 is a major transition year for employers and employees as key parts of the Patient Protection and Affordable Care Act (PPACA) go into effect in 2014. For part-time workers, the changes aren't good.

The theme park, Universal Orlando, home to The Wizarding World of Harry Potter, will stop providing health insurance for part-time employees starting December 31, 2013. The Orlando Sentinel explains:

The reason: Universal currently offers part-time workers a limited insurance plan that has low premiums but also caps the payout of benefits. For instance, Universal’s plan costs about $18 a week for employee-only coverage but covers only a maximum of $5,000 a year toward hospital stays. There are similar caps for other services.

Those types of insurance plans — sometimes referred to as “mini-med” plans — will no longer be permitted under the federal Affordable Care Act.

Five hundred workers will be affected. Remember that whole “If you like your plan, you can keep it” business? Tell it to the theme park workers who have the mini-med plan.

The PPACA will also cause the hours of some part-time state workers to vanish in Virginia. Last week, the state legislature passed a bill that would limit part-time workers to 29 hours a week to avoid the PPACA’s employer mandate which kicks in for employees who work 30 or more hours a week.  Community college employees will take the brunt of the cuts.

Ed Morrissey sarcastically calls the Universal Orlando news, “Just another sign of progress for the underemployed!” His snark does remind us that in this economic recovery millions of people have been working part-time involuntarily, "because their hours had been cut back or because they were unable to find a full-time job.” There’s been some decline in part-time workers since the end of the recession, but it's remained around eight million over the last few months. The economy is not growing fast enough to create enough full-time jobs. Many of these theme park and state workers will be hit with the double whammy of not being able to find full-time work and losing their health insurance.

Expect more news like this as the PPACA jigsaw puzzle comes together. Today, the Department of Health and Human Services issued the final rule on essential health benefits, actuarial value, and accreditation requirements that will direct insurers and states on how they must design health insurance plans in the individual and small group markets starting January 1, 2014. As employers process these new regulations, they’ll make adjustments that could mean changes in health benefits and/or the composition of its workforce.

One of the PPACA’s intentions was to expand health care coverage. That’s not happening in the two cases above. Instead, 2013 has become a case of employers and employees picking up the pieces from the health care law’s myriad of broken promises.

Editor's note: The post was updated to note that the final rule will direct the design of insurance plans in the indivdual and small group markets.

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