Businesses heavy on part-timers face tough healthcare rules

One too many part-time workers could soon make some smaller businesses subject to steep penalties.
The healthcare reform law says employers have to offer affordable health insurance to full-time workers or pay a penalty of up to $3,000 per worker, starting in 2014.
Businesses with 50 or fewer workers are exempt from the penalties.
Now here’s where it gets dangerous for smaller businesses: A company’s worker total is determined by combining both full-time and full-time equivalent workers (FTEs).
What’s an FTE? Every 120 part-time hours worked per month equals one FTE — no matter how many employees work those 120 hours.
So let’s say you have 10 part-time employees that work a total of 480 hours in one month. That’s equal to four FTEs. If you have at least 46 full-time workers, you’ll have to add the four extra FTEs to that figure — for a total of 50 full-time workers. You’ll then have to offer health insurance to your workers or face the $3,000 per full-time worker penalty.
That means businesses that load up on part-time employees — like retailers and restaurants — will have to keep very close tabs on the number of hours being worked by part-timers.
Skirting penalties
That stands to be a huge headache for many businesses. So much so that some business owners, who employ lots of part-timers, are looking for ways to avoid the penalty at all costs.
Take the Trolley Car Diner and the Trolley Car Cafe in Philadelphia, for example. Between the two, business owner Ken Weinstein employers 75 full- and part-time workers. His FTE total is 41.
The problem: Should he one day decide to open another restaurant, it would put him over the 50 FTE limit — and he’d struggle to afford to offer his employees’ health coverage or pay the penalty.
One solution he says he’d consider: Opening the third restaurant under a different corporate name to avoid the penalty.
Do you think the mandate that employers with over 50 FTEs must offer health coverage to their employees puts an unjust burden on smaller businesses? Share your opinions in the comments box below.