Part-Time Workers and the Affordable Care Act

Historically, part-time workers have been more likely than full-time workers to be uninsured. In 2012, 27.5% of part-time workers were uninsured throughout the first half of the year, on average, compared with 17.4% of full-time workers.  The Affordable Care Act’s (ACA) Medicaid expansions and subsidized marketplace insurance offer pathways to coverage for uninsured part-time workers.  News reports have noted that some large employers dropped offers of coverage to part-time workers in 2014, citing subsidized marketplace coverage that was only available to workers without an “affordable” ESI offer as one factor in their decisions.  However, a number of possible barriers to ACA-related coverage exist for part-time employees who lose ESI offers.  For example, very low-income workers living in states that did not expand Medicaid may become uninsured should they lose their offers of ESI.   In addition, married part-time workers whose spouses’ had an offer of coverage would very likely be ineligible for subsidized marketplace coverage.  This is because most ESI offers have single premiums below 9.56 percent of income and because most offering firms offer plans covering dependents.  In addition, depending on the part-time workers’ age and income level, marketplace coverage may cost part-time workers more out-of-pocket than their previous ESI coverage.

In this paper, we examine pre-2014 data on part-time workers regarding their own-job ESI offers, their spousal offers, their family’s modified adjusted gross incomes (MAGI), and their state of residence (and Medicaid eligibility threshold), investigating the possible implications of employers restricting ESI eligibility to full-time workers.  First, we examine access to ACA-related coverage for part-time workers who lack an ESI offer. We also simulate scenarios where part-time workers lose their offer of coverage.  In order to obtain an adequate sample size to examine sub-groups of part-time workers, we pool data from the 2012 and 2013 Medical Expenditure Panel Survey–Household Component (MEPS-HC).  Data from the MEPS-HC are well suited for this analysis since they contain information on employment status, hours worked at their current main job, ESI offers and take-up, enrollment in public coverage, non-group private coverage, out-of-pocket premiums, and detailed sources of family income.  For this analysis, we augment MEPS with state information on 2014 Medicaid eligibility thresholds and federal rules governing the calculation of MAGI.  In addition, because employers who drop insurance for part-time workers may raise these workers’ wages in response to this change, we simulate the impact on out-of-pocket premium costs for marketplace coverage from changing subsidy levels under a number of wage increase scenarios. The resulting analysis sheds light on the potential consequences of employer decisions regarding offering coverage to part-time workers.