Republicans, industry organizations and a coalition of employer groups are ramping up their efforts to change the Affordable Care Acts definition of full-time employment from 30 hours a week to 40 hours a week a move that could release many employers from having to offer health care coverage to their employees.
The majority Republican 114th Congress introduced a bill in the House this week that would change the acts definition of full-time employees to those working an average of 40 hours per week. The Senate is also expected to introduce a companion bill this week.
Business associations, employer groups and industry organizations have joined the effort, urging House leadership to pass the bill.
Many employers are concerned that, despite their best efforts to comply, liability [under the employer shared responsibility rule] could be triggered, given the complexity of administering coverage to comply with the law, particularly with respect to employees who work a variable schedule, short-term employees (for example, 4-6 months), temporary, seasonal or similar contingent workers, says James Klein, president of the American Benefits Council.
In a letter to House leadership, Klein says, One helpful step Congress can take to alleviate these employer concerns is to pass legislation increasing the hours of service threshold for determining full-time employee status.
The More Time for Full-Time Coalition, a group of organizations representing hundreds of thousands of employers, also sent letters to House and Senate leadership this week urging them to support legislation that changes the definition of full-time employment to 40-hours a week.
Many employees are being hurt by lost wages and hours because the 30-hour-per-week definition in the ACA is forcing employers to restructure their workforce by reducing their employees hours to alleviate the burden of compliance, the letter says. Members of the coalition include the National Restaurant Association, the U.S. Chamber of Commerce and the Society for Human Resource Management.
Harmonizing the definition of full-time employee in the ACA with the traditional 40-hour definition would benefit both employees through more hours and income, and employers now able to focus on growing their business and creating jobs rather than restructuring their workforce, the letter adds.
President Obama is likely to veto the legislation and Democrats have expressed disappointment with the Republican effort to alter the ACAs full-time employment definition.
Republican leaders have said they want to work with Democrats on policies that would help workers and the economy, so its extremely disappointing that they appear to be doing the exact opposite right out of the gate, says Senator Patty Murray (D-Wash.). This unacceptable proposal would not only hurt workers by denying them the health care coverage they depend on, but it would actually encourage companies to game the system by cutting time for the millions of workers who work more than 40 hours.
She adds, Im willing to work with anyone on commonsense changes that would make health care more affordable and expand access for families, but this costly, harmful Republican legislation which even some conservatives have openly opposed is a big step backwards for workers who need health care and economic security.
A Congressional Budget Office analysis of the bill predicts it will reduce the number of people receiving employment-based health care coverage by one million people and increase the number of people obtaining coverage through Medicaid, the Childrens Health Insurance Program, or health insurance exchanges by between 500,000 and 1 million people.
As a consequence of the changes in employer mandate penalties and in people's sources of insurance coverage, the CBO and the Joint Committee on Taxation estimate that enacting the House bill would increase budget deficits by $18.1 billion over the 2015-2020 period and by $53.2 billion over the 2015-2025 period.
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