Monday, August 11, 2014

Obamacare's Impact on Adjunct Professors

About 70% of all faculty at colleges in America are not tenured or even on a tenure track.  Even at 4 year colleges, about 64% of the faculty is not on the tenure track.  What that means is that a huge proportion of classes are taught by part-time adjunct professors.  They generally get low pay and no benefits.

The Affordable Care Act, better known as Obamacare, tries to "help" adjunct faculty by requiring large employers to offer insurance to all full-time employees.  Most university's would meet the 50 employee limit and be considered large.  But it's unlikely they'll offer insurance to adjuncts, what they will do is make sure none of their adjuncts can claim full-time status.  And even though full enforcement of the employer mandate has been delayed, ACA's "look back" rules require employers to take action now to determine their employees' status in future years.

If an employee averages more than 30 hours per week, that employee is considered full-time.  For hourly workers, that's easy to track but for salaried workers, the IRS has provided a hodgepodge of methods for employers to keep part-time workers part-time.  The IRS recently posted guidance directly addressing the question of part-time, adjunct faculty.

So how does this work?  I have extensive experience teaching as an adjunct at several different colleges but the compensation methodology is pretty much the same.  Most colleges have a per credit hour rate that is adjusted depending on the experience and education level of the instructor.  For example, the rate might be $800 per credit hour.  For a three credit class, the professor would receive $2400.  The professor will have a contract setting forth expectations for teaching the class, when and how grades will be submitted, and any technical training the professor needs to complete to teach the class.  From there, the professor teaches the class, turns in the grades, and gets paid.  Some colleges pay as the class proceeds, others pay all at the end.

Of course, no one tracks the hours worked.  Classroom time is easy to track, but preparation and grading time are not.  Heck, I even spend some time interacting with students outside the classroom.  I think I'm like a lot of adjunct professors, I have little idea how many hours I spend on my classes.  And my employers know even less about what I'm doing.  Most adjuncts would probably get depressed knowing how much time and effort teaching a class takes, it's better to just do it for the love of teaching.

Universities have been scrambling around, looking for some kind of formula to determine how many hours their adjuncts can teach.  Can some assumption be made relative to the number of hours worked per credit hour?  What about comparing the credit hours taught relative to what full-time faculty teach?  Asking adjuncts to track hours is probably impossible, there's a good chance we'd all quit if given such an onerous administrative task.

None of these methods are universally workable, especially considering that semesters no longer have uniform lengths, full-time professors are not a good benchmark because they have research and administrative duties adjuncts typically don't, and different adjuncts commit different amounts of time to their classes.  This isn't even to mention the proliferation of online classes, where there is not even easily measurable classroom time.

So the IRS came up with this:

"Until further guidance is issued, employers of adjunct faculty (and of employees in other positions that raise analogous issues with respect to the crediting of hours of service) are required to use a reasonable method for crediting hours of service with respect to those employees that is consistent with section 4980H."

Somewhat more helpful is this one method that is approved, but IRS notes is not the only possible method:

Credit "an adjunct faculty member of an institution of higher education with
(a) 2 1/4 hours of service (representing a combination of teaching or classroom time and time performing related tasks such as class preparation and grading of examinations or papers) per week for each hour of teaching or classroom time (in other words, in addition to crediting an hour of service for each hour teaching in the classroom, this method would credit an additional 1 1/4 hours for activities such as class preparation and grading) and, separately,

(b) an hour of service per week for each additional hour outside of the classroom the faculty member spends performing duties he or she is required to perform (such as required office hours or required attendance at faculty meetings)."

Let's work an example.  Suppose the faculty member is teaching one 3 credit class with the standard 3 hours of class time per week.  The faculty member is also required to have 1 hour of office time.  So under Part (a), there would be 3 * 2.25 = 6.75.  We add the hour office time, giving us 7.75.  For this particular institution, it appears that teaching 3 sections would probably work (3 * 7.75 = 23.25, below 30).

The problem with this rule is that even slight variation in our assumptions could make it unreasonable.  What if the professor is teaching multiple sections of the same class?  We can then assume the prep time is probably lower than for someone who is teaching different classes.

Another weakness is it's not clear that even the IRS method of estimation would be binding on the employee.  IRS can determine that it will not seek to enforce the penalty if the method is followed, but could an employee track the actual hours worked and force the employer to offer insurance if the actual hours go over 30?  I suppose some judge will get to decide that some day if the employer mandate ever takes effect.

And what about all those online classes with no regular meeting times?  There are also mixed online and classroom sections.  There's no guidance from IRS on online teaching as far as I can tell.

If you're working with a university either in administration or as an adjunct, I'd like to hear what your institutions are doing.  Feel free to make a comment or send me an email.  Here are what my institutions have done:

Northwood University:  Adjuncts can only teach one class at a time.  It's my understanding this rule was enacted directly in response to ACA.  Northwood has a lot of different schedules, with traditional semesters as well as compact 6-8 week semesters. I have had classes on differing schedules overlap a couple weeks, but they allowed that.

Concordia University:  There's no formal rule as far as I can tell.  I have only taught one class at a time for them so far, I don't know if there's a formal prohibition going over that.

Saginaw Valley State University:  SVSU has a collective bargaining agreement limiting adjunct faculty.  If I remember correctly, the maximum was 14 credit hours per year.  I once taught 9 credit hours in one semester for them, but I suspect they would avoid doing that now.  Likewise, I once taught two 4 credit classes in the summer session, which meant I was in the classroom 16 hours per week.  Under the current guidance, they should avoid that kind of teaching load if they are not going to offer insurance (16 * 2.25 = 36).

Thanks for reading.  If you need more guidance on how ACA affects employers, check out The Small Business Guide to Obamacare.