Health Changes Spur Test of More Part-Time Workers

October 11, 2012

Darden Restaurants Inc., the owner of Olive Garden and Red Lobster restaurants, is putting more workers on part-time status in a test aimed at limiting costs from President Barack Obama's health care law, says the Associated Press.

  • Darden declined to give details but said the test is only in four markets across the country.
  • The move entails boosting the number of workers on part-time status, meaning they work less than 30 hours a week.
  • Under the new health care law, companies with 50 or more workers could be hit with fines if they do not provide basic coverage for full-time workers and their dependents.
  • Starting Jan. 1, 2014, those penalties and requirements could significantly boost labor costs for some companies, particularly in low-wage industries such as retail and hospitality, where most jobs don't come with health benefits.

Starting next year, Darden will also change the way it offers health insurance to full-time employees, to keep costs more predictable. Instead of offering one insurance plan for all 45,000 employees, it will give workers a contribution toward buying coverage and then send them to an online health insurance exchange where they can chose from five medical, four dental and three vision plans.

More employers are looking at this concept, known as defined contribution health insurance, as a way to stabilize health insurance costs.

Source: Candice Choi, "Health Changes Spur Test of More Part-Time Workers," Associated Press, October 9, 2012.

 

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