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October 30 2014

County Government Hit with Big ObamaCare Fines

Carrie L. Lukas

Taxpayers paying close attention to their state and local budget debates may notice a new line item that has to be accounted for:  penalties paid to the federal government for ObamaCare compliance.  

As California’s Modesto Bee reports:

Stanislaus County government will pay the penalty rather than provide health coverage to certain part-time employees. And it will closely watch time sheets of workers to avoid additional penalties for employers under the Affordable Care Act next year.

Starting in 2015, the federal law will require the county and other employers to pay penalties if they don’t provide health coverage to employees who work 30 or more hours a week over a six-month period. County health benefits are not provided to all 30-hour-per-week employees. The county will be penalized $3,000 for each of those “variable hour” workers who buys coverage from the Covered California health exchange and qualifies for a subsidy to lower premiums.

Tuesday, staff told the Board of Supervisors there are about 50 employees in that category and some are eligible for a subsidy, which could translate to $33,000 in penalties. County leaders chose to pay the feds after learning basic coverage for the workers could cost up to $50,000 annually.

Those in charge of balancing the local government budget are prudently weighing their options, just like businesses around the country have been in response to ObamaCare’s new costs and obligations.  In this case, providing health care to these workers is more costly than paying the penalties, so they are forking over more than $30,000 to the feds.  That’s probably about the salary of one of those part-time workers for an entire year, so local taxpayers might well ask themselves why the federal government is ceasing so much of their tax revenue which could be used to create a job—of even returned to the taxpayers themselves.

Next year, county officials may find a new solution:  They might figure out that rather than 50 part-time employees, they can do better with 25 full-time employees.  That might be good news for some, though not for the employees that find themselves out of a job or for workers who preferred to have a part-time position.

The media and ObamaCare defenders often imply that businesses are callous and acting unfairly when they make changes to their employment practices in response to ObamaCare’s regulations.  But this is how the real world works in any organization or entity that has scarce resources.  If ObamaCare is going to create higher costs in one place, something will have to give somewhere else.  Local governments across the country will be making the same calculations as Wal-Mart, fast food franchises, and local colleges.  As a result, local government employees may find that they end up joining the ranks of those out of luck--and possibly out of a job--because of ObamaCare. 

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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