Obamacare costs may force UNC to cut hours for 6,500 employees

03/05/2014

Complying with Obamacare could cost the University of North Carolina system nearly $50 million next year, but it could cut employee hours to lessen the impact.

Marty Kotis, a member of the UNC Board of Governors, says that compliance could cost the UNC system $47 million next year.

UNC could lessen the financial impact by cutting hours, moving to cheaper health plan.

Obamacare could cost the University of North Carolina (UNC) system as much as $47 million per year starting in 2015 — and the universities may cut hours and jobs to comply, Campus Reform has learned.

The Affordable Care Act requires the system to start providing insurance for 8,586 non-permanent employees who work more than 30 hours per week — but UNC is considering just cutting their hours to avoid having to pay for the insurance, Marty Kotis, a member of UNC Board of Governors’ Budget and Finance Committee, writes on his blog, the Greensboro Observer.

“Campuses are going to have to make changes to their business model. That may mean less temporary employees than they would otherwise have." - Brian Usischon, UNC Associate Vice President for Human Resources   Tweet This

Kotis told Campus Reform that UNC Chief Operating Officer, Charlie Perusse, said universities will “likely” cut the hours of 75 percent of eligible employees in order to lower the cost of complying with the mandate to between $11-$22 million.

Perusse confirmed the accuracy of the numbers in an interview with Campus Reform Monday morning. 

UNC’s Associate Vice President for Human Resources Brian Usischon said he also wasn’t sure how the universities would handle the costs, but offered job cuts as one example.

“Campuses are going to have to make changes to their business model,” Usischon said in an interview with Campus Reform. “That may mean less temporary employees than they would otherwise have."

The $47 million number comes from the current cost of health insurance at UNC — for which the 2014 cost is $5,435 per employee, according to Kotis — but those rates may be even higher in 2015.

“We don’t know what it will be next year,” Kotis said in an interview Campus Reform. “They told me [it would cost] $5,200 [this year]; I asked for a chart of the history and it showed $5,450 or something. And by next year it could be $6,000 for all we know. So the number could be higher."

Health care costs have already risen 34 percent in the past seven years, according to Kotis. UNC is attempting to get approval to offer employees such as graduate and teaching assistants, temporary faculty, and student employees a cheaper plan.

The employees who qualify include graduate and teaching assistants, temporary faculty and student employees.

source