McDaniel food service workers may regain health coverage next year

July 19--A handful of contractual food service employees at McDaniel College who lost health insurance earlier this year may regain coverage in 2015 under new full-time classification guidelines.

Workers at McDaniel College's dining service are employed by Sodexo, a multi-national food service company with more than 130,000 employees servicing college campuses, hospitals, corporate sites, government agencies and museums. About 3 percent of seasonal Sodexo employees, including those at McDaniel College, lost health insurance when the corporation implemented a new employee hourly tracking system to comply with mandated health insurance regulations under the Affordable Care Act.

On June 27, Sodexo announced a new classification starting January 2015 to provide an hourly working credit for seasonal workers.

Under the new classification, employees -- including those at McDaniel College -- will receive a credit during the off-season for an average of the number of hours they worked when their facility is open, Dinges said.

Before the implementation of the ACA, Sodexo determined full-time eligibility if a worker averaged 30 hours per week over a six-week period across three quarters, or over 18 weeks, said Sodexo spokesman Enrico Dinges.

Full-time employees at Sodexo are eligible for health care and paid time off. Both full-time and part-time employees are eligible for 401K savings plans.

According to the Internal Revenue Services, under the ACA corporations with 50 or more employees were mandated to offer health insurance for employees who work an average of 30 hours per week ina calendar month.

To meet ACA standards, Sodexo implemented a new system to track the hourly rates of their employees based on an average of 30 hours per week over 52 weeks.

"The policy affected 3,000 to 4,000 employees that primarily work in campus settings or temporary closing facilities," Dinges said. "In the case of McDaniel College, which closes for the summer, there's no need for service and no need for employees."

The new classification impacted 13 of the 104 Sodexo employees at McDaniel, all of whom lost their full-time status. Four of the full-time employees who lost their classification were receiving health insurance coverage through Sodexo, Dinges said. These employees lost their health insurance effective January 2014, he said. The other nine full-time employees, who lost their classification, received health insurance from alternative options, Dinges said.

Sodexo would have faced fines if it would have incorrectly classified a full-time employee as part-time, Dinges said.

Corporations with 50 or more employees face a $2,000 annual penalty times the number of full-time employees minus 30. Corporations with 50 or more employees receiving a tax credit face a $3,000 annual fee up to a maximum of $2,000 times the number of full-time employees minus 30. This penalty is set to increase each year by the growth of insurance premiums.

According to Dinges, under the new system Sodexo expects many of the employees who lost their status will regain full-time classification in 2015 and eligibility for health insurance through the company.

"As we reviewed this year and eligibility for 2015, we looked to see what we could do as company to remain competitive in the workforce and retain our employees," Dinges said. "We want to make our employees whole."

Dinges said Sodexo expects about 5,200 more employees to qualify for company-provided health insurance in January 2015.

But labor unions say Sodexo exploited a loophole in the ACA. According to provisions made by the U.S. Treasury Department, educational workers will not be treated as part-time because their school is closed or operating on a limited schedule during the summer. The provisions also state that seasonal employees who work six months or less generally will not be considered full-time employees.

Because Sodexo food service employees are contractual and not directly employed by the universities and other educational institutions, Sodexo was not mandated to abide by the IRS full-time classification system for workers.

Unite Here, a labor union representing hotel, food service, laundry and casino gaming industries, hosted protests across the country to organize Sodexo employees to regain their classification and close the loophole, which caused thousands of workers to lose benefits.

"And we continue to believe that the Sodexo loophole should be closed by the IRS to prevent other companies from abusing the ACA and so that bad actors like Sodexo cannot deprive workers of benefits they need as a way to pad their bottom lines," said Unite Here officials in a statement.

However, Dinges said, the initial reclassification was not done as a cost-saving measure by Sodexo.

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