WEDNESDAY, Jan. 29, 2014 (HealthDay News) -- Beginning in 2015,
U.S. businesses with 50 or more workers must provide health
insurance to "full-time" employees, meaning workers who log at
least 30 hours a week, on average.
Holding employers accountable for providing health insurance to
full-time workers, and requiring them to pay penalties if they
don't, is one way the Affordable Care Act expands coverage to
But some businesses are already skirting the law's "shared
responsibility" provision by scaling back the number of hours that
employees work. Some lawmakers worry that employee wages and job
growth could suffer as a result.
On Tuesday, retail, franchise and community college
representatives urged Congress to replace the so-called "30-hour
rule" because of the expense and difficulty implementing the
"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 and variable-hour employees.
Peter Anastos, owner and co-founder of Maine Course Hospitality
Group, a New England hotel operator, said the 30-hour threshold
would "more than double and maybe even triple" the company's costs
this year. Anastos also spoke on behalf of the International
Ivy Tech Community College, Indiana's statewide community
college system, estimates that implementing the unfunded mandate
for all adjunct faculty members working 30 or more hours a week
would cost $10 million to $12 million annually. Instead, the
college has limited the number of hours that its 4,500 adjunct
faculty members can teach, Ivy Tech President Thomas Snyder
Their testimony before the House Ways and Means Committee came
just hours before President Barack Obama's State of the Union
address in which he called on Congress to restore unemployment
insurance for 1.6 million Americans whose benefits have expired and
to raise the federal minimum wage.
The employer responsibility provision, also known as the
employer mandate, was scheduled to take effect this year, but last
July the Obama administration postponed enforcement of the
requirement until 2015.
The 30-hour rule was meant to close the insurance gap for people
who don't already qualify for job-based health insurance.
But some companies are cutting workers to 29 or fewer hours
ahead of the mandate. Nearly one-third of franchises and 12 percent
of non-franchise businesses have already reduced worker hours,
according to an International Franchise Association/U.S. Chamber of
Retail giant Target Corporation said this month that it would
discontinue health insurance coverage for part-time workers on
April 1. The company will send those workers to the new health
insurance marketplaces created by the Affordable Care Act.
House Ways and Means Committee Chairman Dave Camp (R-Mich.) said
he hoped the committee could "move past the denials that this law
does not have an effect on jobs."
"Both parties should be able to come together to ensure that we remove barriers to job growth and wage increases," he said.
But Michigan Rep. Sander "Sandy" Levin, the committee's
highest-ranking Democrat, countered that the hearing was nothing
more than another attempt by Republicans to undermine the
Since most employers already provide health insurance to their
employees, Levin said, only a small percentage of employers will be
affected by the "shared responsibility" provision in the Affordable
Care Act, also known as Obamacare. Yet the committee has yet to
hold a single hearing on extending unemployment insurance, a
measure that would improve the lives of 1.6 million Americans,
Washington Democrat Jim McDermott put it more bluntly: That
businesses are being forced to cut hours due to Obamacare is a
Republicans are leading the charge to repeal the 30-hour rule.
Rep. Todd Young (R-Ind.) introduced a bill last June -- the Save
American Workers Act -- that sets the bar for full-time health
insurance coverage at 40 hours. The measure has 192 Republican
A similar Senate bill, with 13 co-sponsors, including two
Democrats, and a companion bill in the House with largely
Democratic backing have also been introduced.
Is the 30-hour rule really a job killer? Experts disagree on its
Lanhee Chen, a research fellow at the Hoover Institution and
lecturer in public policy and law at Stanford University, told the
House committee Tuesday that the 30-hour rule will likely make it
harder for people to find full-time work. He said the rule
disproportionately harms women, those without a college degree,
young Americans and the poor.
Helen Levy, a University of Michigan research associate
professor, cited research suggesting that concerns about employers
cutting worker hours are overstated. Hawaii's decades-old employer
mandate, which requires health coverage for people working 20 or
more hours a week, has had no significant effect on overall
employment compared with the rest of the United States, she
What's more, moving to a 40-hour threshold "would actually make
the potential problem much worse," Levy said, because there are
many more uninsured workers who work 40 hours than 30 hours.
"If you move the threshold, there are about three times as many workers who would be vulnerable at that higher level," she said.
Moving to a 40-hour threshold would harm more workers and raise
federal spending on health insurance subsidies, Sherry Glied, dean
of New York University's Robert F. Wagner Graduate School of Public
Service, said in a recent blog for The Commonwealth Fund.
"It's probably going to backfire and cause more people's lives to be disrupted," she said.
For more on the employer responsibility provision, go to
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