Calif. Farmers Worry About Cost of Insuring Workers Under the ACA

Farm labor contractors in California are concerned about the cost of providing health insurance under the Affordable Care Act to thousands of uninsured field workers, the New York Times/Kaiser Health News reports.

Details of Concerns

J. Edward McClements -- senior vice president at Barkley Insurance and Risk Management -- said, "It's difficult when you've got 1,000 workers who've never had health insurance before, to get an idea of what their costs will be."

Minimum health coverage under the ACA could cost the agricultural industry about $1 per employee for every hour that the employee works in the field, according to estimates by insurance brokers and providers.

Farm labor contractors generally have about a 2% profit margin, leaving little room for the added cost of providing health coverage to their workers. They say the added cost will be passed on to growers, who likely will pass it on to consumers in turn.

In addition, reducing workers' hours to part time -- a strategy adopted by some businesses to avoid meeting the ACA's requirements -- is not an option for the agricultural industry because crops must be harvested year-round.

Even employers who already offer their field workers health coverage face major changes under the ACA, observers say. For example, many employers currently offer so-called "mini-med" plans with coverage limits as low as $5,000. However, such plans are prohibited under the reform law.

Workers' Concerns

Meanwhile, field workers say they will be unable to afford contributing up to 9.5% of their wages to health care expenses. According to brokers, the minimum health plan that complies with the ACA would cost farm workers about $250 monthly.

Jose Romero --- an employee at Sunrise Farm Labor -- said, "The salary that they give you here, to pay insurance for the family, it wouldn't be enough" (Varney, New York Times/Kaiser Health News, 8/21).