Can an employee forfeit their medical benefits to get more than 30 hours per week? I need the income more than I need the insurance, but how can I get one without the other?
Trading Off in Massachusetts
Dear Trading Off in Massachusetts,
I’m going to answer this from the vantage point of federal health reform, not Massachusetts’s current system. For federal health reform, employers with more than 50 full-timers (or equivalents) have to offer a plan to everyone working more than 30 hours per week. (I won’t get into the details about how hours per week are calculated or how to count employees.) As soon as you are working more than 30 hours, you are in their count for full-timers and have to be offered the plan. You could then refuse to enroll and either buy health insurance somewhere else or pay the penalty/tax.
If you go to the exchange and you qualify for a tax credit or a subsidy, your employer could be charged a penalty. You would qualify for tax credits and/or subsidies if your income was less than 400% of the Federal Poverty Limits. For a family of four, 400% is $92,200 per year.
If you buy a plan and do not qualify for a subsidy or credit, then I think you “get away with it”. You would also escape if you went uninsured and paid the penalty.
There is one other place where your employer might get tripped up: the insurer. The insurer offered your employer a group rate based upon all or most of the people enrolling who qualify – that is, all the people who work at least the 30 hours. When the insurer sees that not everyone is enrolling, they may have the right to charge a higher rate. Most group contracts set a minimum percentage of employees enrolled.
So, it’s a clever strategy if you have a high income or you plan to go without health insurance. Otherwise, your employer gets tagged with a penalty if you drop out of their plan.
I’m sure that creative escape hatches will be tested and tried, as 2014 draws near. Is there a saying – where there is a rule, there is a way out? If not, there should be!