State Governments Mulling Options to Move Part-Time Employees to Exchanges

According to the Washington Post, Washington state may be among the first states in the country to explore a proposal that would shift some government workers out of their current health plans and onto the insurance exchange developed under President Barack Obama’s health care law. State lawmakers believe the change, which could affect thousands of part-time state employees and education workers, would save the state $120 million over the next two years. It would consequently push more health care costs onto the federal government because many of these lower-income workers would likely qualify for federal subsidies.

Washington state appears to be the first major government to seriously explore the possibility of pushing public employees into the exchange, but it probably won’t be the last. Virginia, for example, is requiring all part-time employees to work fewer than 30 hours, which will help the state avoid penalties for not providing health coverage. Florida is facing a potential $300 million penalty for not covering workers who are on duty 30 to 39 hours a week, so it’s moving to extend coverage to those employees.

Washington state is in a less common situation because it already provides coverage for part-timers down to 20 hours a week. The Washington state proposal has been advanced as a way to help deal with a $1.2 billion state budget shortfall. Under it, the state would make policy changes and secure agreements in which staffers who work between 20 and 30 hours a week would get extra compensation but lose their current health coverage. They would then be eligible to get health care in the federal plan, without any consequence for the state.