by Casey B. Mulligan
June 10, 2014
The Affordable Care Act will put millions of workers in the extreme situation of having zero short-term financial reward to working full-time rather than part-time. Two separate ACA provisions can fully eliminate the reward to full-time work. The first pertains to full-time employees of firms that do not offer health insurance: by cutting weekly work hours to 29, they save their employer the annual salary equivalent of $3,000, or, they save their employers the threat of larger penalties. The second provision pertains to full-time employees at firms that do offer health insurance. Almost 20 million workers at such firms would be ineligible for exchange subsidies unless they switched to a 29-hour work schedule, in which case they would be eligible for subsidies without creating any penalty for their employer. It is very likely that the ACA will result in millions of people spending fewer days per year at work.