Part-time employees are much less likely to take advantage of employer-sponsored health care benefits than full-time employees, according to new data from ADP Research Institute.
The new information could have a significant effect on how companies respond to reforms in the Patient Protection and Affordable Care Act, says Chris Ryan, vice president of Automatic Data Processing Inc.'s strategic advisory service in Louisville, Kentucky, and co-author of the report.
The study shows that in 2012, when eligible part-time employees were offered health benefits, only 53 percent elected coverage vs. 77 percent of full-time employees. The study is based on 2012 employee data from 300 U.S.-based organizations.
It also shows that, while part-time workers make up 23 percent of the total workforce, only 15 percent of them are eligible for health coverage. As a result, part-time employees represent less than 5 percent of the total population participating in their employer's health coverage.
"I was more surprised by the low percentage of workers who were eligible for health insurance than that only half of them participated," says Andrew Webber, president and CEO of the National Business Coalition on Health.
That's likely to change in 2014 when Affordable Care Act regulations kick in requiring companies to provide full-time workers—defined as anyone working 30 or more hours per week—with health care benefits. This will transition a large segment of the part-time workforce to full-time status, putting companies in the position of having to offer benefits to more employees.
"I don't think employers will be surprised by this data," Webber says. "But the jury is still out on how they will respond."
Whether employers rework their part-time workforce to keep them under 30 hour a week or they adapt their budgets to accommodate the higher cost of this workforce segment, they will have to make big decisions in the coming year, Ryan says. "It's no longer just a benefits issue. It's about rethinking the cost models that shape your workforce strategies."
While companies can't assume that only 53 percent of newly eligible workers will take advantage of health care benefits, this data can be viewed as a benchmark.
The study also shows that employer size correlates with total premiums, irrespective of employee contribution levels. And despite wide disparities in total premium costs on an employer-by-employer basis, very large employers (with more than 5,000 employees) as a group pay 14 percent less for health insurance than employers with smaller workforces. The benefits of these lower premium costs are shared equally by employer and employee.
"The key question for employers now is: What percentage of the newly eligible population will be likely to participate in benefits programs?" Ryan says. "Because the difference of even a few percentage points for a large company can have a dramatic shift on costs."
Sarah Fister Gale is a writer based in the Chicago area. Comment below or email firstname.lastname@example.org.