Republicans Target Obamacare ‘30-Hour’ Rule
Obamacare supporters argue that changing the employer mandate to 40-hour workers will widen the pool of employees vulnerable to hour cuts.
February 5, 2014 - 10:48 pm
WASHINGTON – In advance of a Congressional Budget Office report warning of lost jobs because of employer mandates, House Republicans warned last week that the Affordable Care Act’s definition of full-time work as 30 hours or more per week is already forcing employers to cut worker hours.
Beginning in 2015, U.S. businesses with 50 or more workers must provide health insurance to full-time workers or pay a fine.
Republicans argue that the employer mandate’s designation of 30-hour-per-week workers as full-time employees has led to reductions in worker hours by companies who cannot afford to provide them with insurance.
“The 30-hour rule in the health care law is forcing employers to make the tough decision of cutting hours and workers, and preventing them from growing their businesses,” said Ways and Means Committee Chairman Dave Camp (R-Mich.).
Camp said he would prefer to repeal the ACA entirely, but “that cannot and should not deter us from looking at specific pieces of the law.”
“The people hit the hardest by the law are not bankers, lawyers and doctors,” he said. “They are the single mothers working a restaurant job, the college students paying for their own education by working at the local grocery store, or the firefighters living down the street.”
Camp said he hoped Congress could “move past the denials this law does not affect jobs.”
“Both parties should be able to come together to ensure that we remove barriers to job growth and wage increases,” he said.
Rep. Sandy Levin (D-Mich.), however, said the hearing was nothing more than another attempt by Republicans to undermine the health law.
Supporters of the rule dispute its negative effects and argue that changing the standard to 40 hours per week will widen the pool of workers vulnerable to hour cuts. They also argue that changing the definition of full-time work could raise the overall cost of the ACA.
“The bottom line effect of changing the full time threshold to 40 hours would be to place many more workers at risk of having their hours cut,” Helen Levy, an associate professor at the University of Michigan, told the committee. “This change would also increase federal spending on Medicaid and premium tax credits.”
Levy said that about three to five times as many workers could potentially have their hours cut by employers looking to avoid providing insurance if the definition of full time were raised to 40 hours a week.
Lanhee Chen, a research fellow at the Hoover Institution, countered that reducing hours causes greater economic hardship for those working 30 hours a week.
Chen cited a study that indicated that 2.6 million people would be vulnerable to reduced worker hours, mainly women, young Americans, and people without a college degree.
Levy said this concern has been overstated, noting the experience of Hawaii.
Hawaii has required employers of all sizes since the 1970s to provide coverage to employees who work 20 hours or more per week. She said a recent study determined that this requirement has had no impact on overall employment in Hawaii and has caused a small increase in part-time work.
The committee also heard from retail, hospitality services, and community college representatives about the higher costs and difficulty of implementing the requirement.