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Fed/State Use of Contract Workers Adds to Uninsured

Fed/State Use of Contract Workers Adds to Uninsured

March 25, 2008

Today's Wall Street Journal discusses the federal government's own contribution to the problem of the uninsured through it's use of contract employees who do not receive health benefits even when they function as pseudo-full time workers:

Covering the uninsured is a central issue in this year's political campaign. Yet while politicians debate how best to cover the growing ranks of the uninsured, the federal government -- by outsourcing service jobs -- quietly is adding to those numbers. "As federal employees, we get great insurance," says Dr. Rogers ... "People who work as contractors often don't enjoy those benefits."

Federal contract employees, including cafeteria workers, security guards and cleaning crews, work on Capitol Hill and in federal agencies across the country. Under a 1965 law, called the McNamara-O'Hara Service Contract Act, most contractors with service contracts of more than $2,500 are required to pay locally prevailing wages, plus fringe benefits or the cash equivalent -- $3.16 an hour this year, under a government formula.

Yet some contract employees don't get either the health insurance or the extra cash. Under the law, employers in industries where health insurance typically isn't offered are exempt. Other employers don't comply with the law because they don't understand it or assume they won't get caught, say lawyers and consultants who work in the field. The law doesn't allow contract workers to sue employers over alleged violations, but they can file a complaint with the Labor Department, which may investigate the claim. ...

Outsourcing of federal-government jobs reflects the same cost-cutting imperatives that drive private businesses to outsource. The U.S. government keeps tabs on how much it pays contractors, but no government agency keeps a tally of the workers who are employed or how many have health insurance. Paul Light, a political scientist at New York University's Wagner School of Public Service and a specialist on government employees, estimates that in 2005, there were 5.4 million federal service-contract workers, double the number in 1990.

This is also an issue in Massachusetts where a large number of full time state workers are classified as "03 consultants" and do not receive any benefits. One regular commentator on this and the WBUR Commonhealth blog, Ron Norton -- a passionate critic of Chapter 58 -- works full time teaching radiologic technology at Quinsigamond Community College, and gets no benefits for his labors.

This is one reason why the Commonwealth of Massachusetts (and the University of Mass.)shows up on its own report/list of employers with more than 50 workers accessing MassHealth or the Uncompensated Care Pool. It's time for the Commonwealth to take a fresh look at some of its own employment practices.