THE AFFORDABLE CARE ACT NOT AFFORDABLE FOR COLLEGES AND SOME OTHER EMPLOYERS

Obamacare has its unintended consequences.

HEALTH LAW PINCHES COLLEGES
Some schools cut hours of hard-pressed adjuncts to avoid rules on insurance

By Mark Peters and Douglas Belkin

The Wall Street Journal
January 18, 2013

The federal health-care overhaul is prompting some colleges and universities to cut the hours of adjunct professors, renewing a debate about the pay and benefits of these freelance instructors who handle a significant share of teaching at U.S. higher-education institutions.

The Affordable Care Act requires large employers to offer a minimum level of health insurance to employees who work 30 hours a week or more starting in 2014, or face a penalty. The mandate is a particular challenge for colleges and universities, which increasingly rely on adjuncts to help keep costs down as states have scaled back funding for higher education.

A handful of schools, including Community College of Allegheny County in Pennsylvania and Youngstown State University in Ohio, have curbed the number of classes that adjuncts can teach in the current spring semester to limit the schools' exposure to the health-insurance requirement. Others are assessing whether to do so, or to begin offering health care to some adjuncts.

In Ohio, instructor Robert Balla faces a new cap on the number of hours he can teach at Stark State College. In a Dec. 6 letter, the North Canton school told him that "in order to avoid penalties under the Affordable Care Act…employees with part-time or adjunct status will not be assigned more than an average of 29 hours per week."

Mr. Balla, a 41-year-old father of two, had taught seven English composition classes last semester, split between Stark State and two other area schools. This semester, his course load at Stark State is down to one instead of two as a result of the school's new limit on hours, cutting his salary by about a total of $2,000.

Stark State's move came as a blow to Mr. Balla, who said he earns about $40,000 a year and cannot afford health insurance.

"I think it goes against the spirit of the [health-care] law," Mr. Balla said. "In education, we're working for the public good, we are public employees at a public institution; we should be the first ones to uphold the law, to set the example."

Irene Motts, a spokeswoman for Stark State, a two-year community college, said the new rules were necessary "to maintain the fiscal stability of the college. There are a lot of penalties involved if adjuncts go over their 29 hours-per-week average. The college can be fined and the fines are substantial."

Nationally, colleges through trade groups such as the American Association of Community Colleges are asking the Internal Revenue Service to write special rules for adjuncts. The IRS recently acknowledged the issues in higher education, but so far hasn't agreed to take further steps.

For decades, colleges and universities have cut costs by hiring adjuncts instead of tenured or tenure-track faculty. In 1975, adjuncts made up 43% of the faculty at U.S. colleges. By 2009, that number had climbed to nearly 70%, according to John Curtis, director of Research and Public Policy at the American Association of University Professors, a professional group with an affiliated labor union.

Many of the adjuncts have other careers in their subject areas, and teach only a single class each semester. But a sizable number make their living from teaching, and have to pay for their own health insurance. Most adjuncts who don't receive coverage through their employer will be eligible for subsidized insurance starting in 2014 through new exchanges set up by the federal health-care law.

Adjuncts long have complained about the terms of their employment, and unionization by them has steadily increased, said Richard Boris, director of the National Center for the Study of Collective Bargaining in Higher Education at Hunter College in New York. Some 37% of part-time, nontenured faculty are in a union, according to a survey conducted by the center between 2008 and 2012.

Some college administrators fear the fallout of the Affordable Care Act will further motivate unionization efforts, said Dan King, executive director of the American Association of University Administrators.

In the short term, Mr. King said he expects many colleges will hire more adjuncts and have each teach fewer classes. But that could make it harder for schools to find enough qualified adjuncts, he said. As a result, he believes institutions over the long term will need to create more full-time teaching positions that rank between a part-time adjunct and a tenured professor.

"I think colleges and universities are going to have to rethink their model for how they compensate adjuncts. It's clear to me over time the current model isn't going to be sustainable," Mr. King said.

At Community College of Allegheny County, which has an annual budget of around $109 million, administrators estimate it would cost at least $6 million to provide health benefits to the 200 adjuncts whose hours are being cut, plus 200 support staff who also work an equivalent of 30 hours.

That likely would have required a significant tuition increase, at a time when the school is trying to keep down the cost for students while absorbing reductions in state funding, said David Hoovler, executive assistant to the college's president.

As part of the college's decision to lower the cap on the number of classes adjuncts can teach, the administration also raised the pay per class by 2.7% and will start offering a health-care plan that adjuncts can buy through the school, Mr. Hoovler said. The college says the plan should be cheaper than what adjuncts could buy on the open market.

Large employers in the private sector also are examining the cost of insuring more employees. Some companies, particularly restaurant operators, have been moving to cut hours to reduce the number of workers to whom they would be required to offer health insurance. Others are preparing to expand health-benefit offerings to more such employees.

The Department of Health and Human Services doesn't expect the law will have a substantial effect on employment, citing the experience of Massachusetts, which has a similar requirement on the state level, as well as a Congressional Budget Office report on the Affordable Care Act.

Health care is just one issue that has been pushing adjuncts to unionize. Many say they also are looking for better pay, job security and more respect.

While the salary of a full professor with a doctorate at a public university has risen with inflation and now averages $120,000 a year, according to the American Association of University Professors, the pay for adjuncts has stayed flat. Even those with a doctorate earn an average of just $3,200 a course each semester, Mr. Curtis said. For a full-time adjunct with a doctorate, that can translate to less than $20,000 a year.

Many adjuncts who hope to break into the academy have been unwilling to risk antagonizing the faculty or administrators who have the power to elevate them to the tenure-track jobs they covet. But as those jobs have become harder to land, adjuncts have become more motivated to challenge the status quo, said Maria Maisto, an adjunct teaching English composition at Cuyahoga Community College in Cleveland and president of the New Faculty Majority, an organization created in 2009 to empower adjuncts.

She is hopeful that changes made on campuses because of the Affordable Care Act will help draw increased attention to the plight of adjuncts.

"We think it could definitely raise a number of HR issues that have fallen through the cracks," Ms. Maisto said. "It could open avenues for reform that weren't evident before."