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Despite Obamacare delay, city will maintain cuts

(July 19, 2013) Although the major mandate of the federal Affordable Care Act has been pushed back until 2015, the Town of Ocean City said this week that it has no plans to reverse the cutback of hours for part-time city employees that were instituted earlier this year.

“There is no plan at this time to make any changes to how we manage the part-time employees,” said city Communications Manager Jessica Waters. “I think we think it’s a little too early in the legislative process to make a final decision.”

Early this year, the city indicated that it would be facing a considerable financial and personnel crunch from the federal Affordable Care Act, popularly known as “Obamacare.” The law would require, as of January 2014, that any employer with 50 or more employees provide health insurance to any worker who is considered to be full-time and non-seasonal.

Under the ACA, the definition of such an employee is one who is “reasonably expected” to work 30 or more hours per week. The IRS had advised employers that any employee who works a total of 1,560 hours or more in 2013 – i.e., 30 hours for 52 weeks – will thus have a reasonable expectation of getting insurance for 2014, unless they work for less than four months.

However, organizational difficulty in the federal government prompted the enactment of the large employer provision to be pushed back to January 2015, making next year – 2014 – the critical calculation year.

The Town of Ocean City already offers health insurance, with premiums heavily subsidized by the town, to what it considers to be full-time year-round employees. But what the city sees as full-time is no longer what the federal government sees as full-time.

According to a report by City Manager David Recor, the town has 47 year-round employees who are classified as “part-time,” but would be scheduled to pick up more than 1,560 hours in 2013, thus requiring the city to offer them enrollment in its insurance plan.

The city’s department heads have been advised that they will need to use “management initiatives” to mitigate this effect, meaning that the hours of the employees in question will be cut below a projected 1,560 for the year, in order to avoid providing them with insurance.

This has considerably reduced the man-hours available to the town. In some critical cases, the city will come out ahead by eliminating a large number of part-time hours and adding a small number of new full-time employees pick up the lion’s share of the work.

The Ocean City Fire Department, for instance, is slated to receive six new firefighter/paramedic positions to reduce its dependency on part-timers from other jurisdictions.

In other cases, lost hours will be made up by hiring additional part-time employees.

“I do believe most of the additional people have been hired,” Waters said. “So we’re going to continue as if there were no change.”

In April, the city proposed to cut the operating hours of the Ocean Bowl Skate Park, saying that the park’s current hours could not be maintained since all of its employees were part-timers whose hours would have to be drastically scaled back.

Under intense public pressure, however, the city restored the skate park’s hours, although this work will likely be made up by additional part-timers in order to avoid insuring the park’ current employees.

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