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.
Peter Anastos, owner and co-founder of Maine Course Hospitality Group, which owns and operates a dozen hotels, said the 30-hour threshold would more than double and “maybe even triple” the company’s costs this year.
Anastos said his company has long offered health benefits to employees who work more than 30 hours a week, but it was able to do so because less than half took the offer. As the law pushes more of his employees to enroll in the company health plan, it will drastically increase costs for his business.
“My employees are now forced to choose between enrolling in a relatively expensive employer health plan and enrolling in a plan in the Health Insurance Marketplace without the assistance of a premium tax credit, which they are ineligible for since they have been offered an employer-sponsored plan. It’s truly a lose-lose situation for both employers and workers,” Anastos said.
Ivy Tech Community College, Indiana’s community college system, estimates that implementing the mandate for all adjunct faculty members would cost between $10 million and $12 million annually.
Ivy Tech President Tom Snyder said the law’s requirement has caused the college to limit the classes taught by each adjunct professor so that they do not qualify for health insurance. This had led to the hiring of additional adjuncts to fill the gaps.
Snyder said part of the problem is that colleges are required to factor in the time adjuncts spend outside the classroom doing other work for the course. He said it is very cumbersome to measure these hours, leading community colleges to ask the Obama administration for guidance.
“Many employees don’t fit neatly into full and part-time categories,” said Neil Trautwein, vice president and employee benefits counsel at the National Retail Federation, whose members include restaurants and other retailers that employ many hourly employees.
Indiana Republican Rep. Todd Young has introduced legislation to “restore the definition of full time” under the ACA.
The bill has the support of 192 representatives, all of them Republican.
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