114th Congress, Vote 14; House of Representatives #30

Save American Workers Act of 2015

Official Title: To amend the Internal Revenue Code of 1986 to repeal the 30-hour threshold for classification as a full-time employee for purposes of the employer mandate in the Patient Protection and Affordable Care Act and replace it with 40 hours.

HR 30: Save American Workers Act of 2015
Passed by the House January 8, 2015, 240-12 (5 abstaining).

Synopsis: This bill would change the ACA’s definition of "full-time" from 30 hours a week to 40 hours a week.

The ACA’s employer shared responsibility provision requires employers with at least 50 full-time equivalent employees to offer health insurance to their full-time workers, starting in 2016. (For larger employers, the requirement took effect in 2015.)

Changing the definition of full time to 40 hours means that employers wouldn’t have to provide insurance to as many workers. But it also means that more people would qualify for Medicaid/CHIP or exchange subsidies, thus increasing the burden on taxpayers.

Why supporters pushed for this bill

• Retail, restaurant, and franchise groups have been among the most outspoken supporters of HR 30. If the definition of full-time is adjusted upwards, these employers will be able to save money on health insurance premiums and have more flexibility with employee hours without having to offer health benefits.
• Supporters of HR 30 claim that businesses are cutting employee hours to less than 30 per week, avoiding the requirement to offer health insurance, and resulting in lower paychecks for workers. There’s some validity to this claim, but the adjustments appear to only be having a slight impact on people who work between 25 and 35 hours per week, which is a very small percentage of the population. Overall, fivethirtyeight estimates that "a few hundred thousand" people – out of 150 million workers – have seen a reduction or cap on their work hours as a result of the ACA. Although this is a very small segment of the population, the impact is not insignificant for the affected workers and their families.
• If the definition of full-time is raised to 40 hours a week, employers would be able to offer additional hours to their employees who are currently working fewer than 40 hours per week, without a requirement to offer them health insurance. Supporters note that this would result in higher paychecks for these workers.
• 40 hours per week is what most people generally consider "full time" and supporters of HR 30 want to align the legal standard with the generally accepted definition.

Why opponents tried to stop the bill

• The CBO estimates that HR 30 would reduce by about one million the number of people covered under employer-sponsored health plans.
• At the same time, the legislation would increase the number of uninsured Americans by about half a million, and would send about 500,000 to one million additional people to Medicaid/CHIP or the health insurance exchanges. Since Medicaid/CHIP and exchange subsidies are funded by the government, the CBO estimates that HR 30 would increase the budget deficit by $53 billion over the period from 2015 to 2025.
• If it’s true that employers are likely to cut employee hours in order to avoid the employer shared responsibility provision (employer mandate), the problem would be more significant if full-time were redefined as 40 hours per week. 80 percent of hourly employees work at least 35 hours per week, and there has been no measurable decline in work hours for that population. But more people would be in danger of having their hours cut if the full-time definition were to be changed, since cutting employees’ hours from 40 to 39 would be much more practical than reducing them from 40 to 29.
• Very few employers are actually impacted by the ACA’s shared-responsibility provision. Most employers either have fewer than 50 full-time equivalent workers, or else they already offer coverage to their full-time employees. Opponents of HR 30 note that the legislation implies that the employer shared-responsibility mandate is an onerous burden on employers, despite the fact that most employers already comply with the existing rules.
• HR 30 is viewed by opponents as simply an effort to undermine the ACA, with little regard for the practical implications of the legislation.

01/08/2015

Status: House passed

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