113th Congress, Vote 156; House of Representatives #2575
Save American Workers Act of 2014
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 2575: Save American Workers Act of 2014
Passed by the House April 3, 2014, 248-179.
Synopsis: HR 2575 would redefine "full time" under the ACA. As written, the law considers anyone working 30 or more hours per week to be a full-time employee. HR 2575 would require 40 hours per week in order to be considered full-time.
Beginning in 2016, the ACA’s employer shared responsibility provision requires employers with at least 50 full-time equivalent employees to offer health insurance to their employees who work at least 30 hours per week (for larger employers, the requirement is effective in 2015).
Redefining full time as 40 hours means that employers would not have to provide insurance to as many workers. But it also means more people would qualify for Medicaid/CHIP or subsidies in the health insurance exchanges, increasing the burden on taxpayers.
Why supporters pushed for this bill
- Industry groups, particularly those in the hospitality and convenience sectors, were among the most outspoken supporters of HR 2575. The National Restaurant Association said that HR 2575 would provide "significant relief" to the restaurant industry, noting the ACA’s 30 hour definition of full time is "artificially low" and limits employers’ ability to provide the flexible work schedules that employees prefer.
- The Association for Convenience and Fuel Retailing said that changing the definition of full time to 40 hours per week would be "more in line with what has traditionally been considered a full-time employee" and would give employers "needed flexibility."
- The hotel industry claimed that unless full time were to be redefined as 40 hours per week, the current law would lead employers to cut hours, resulting in more part-time workers who have to obtain second jobs in order to make ends meet.
- The National Grocer’s Association noted that the 30 hour definition of full time is "drastically altering what opportunities are available to part time workers" and applauded the effort to redefine full time as 40 hours per week.
- If the definition of full-time is increased to 40 hours a week, businesses won’t have to insure as many workers. So it’s generally seen as a boon to employers, particularly those who tend to employ a lot of people who work fewer than 40 hours per week.
- If the definition of full-time is increased to 40 hours a week, employers would be able to bump up their current part-time employees’ hours to just under 40 per week, without being required to offer them health insurance. HR 2575 supporters note that this would increase these workers’ compensation.
Why opponents tried to stop the bill
- The CBO projected that HR 2575 would result in about one million fewer people covered under employer-sponsored health plans.
- The CBO also noted that the legislation would increase the number of uninsured Americans by about 500,000, and would result in about 500,000 to one million additional people on Medicaid/CHIP or the private coverage in the health insurance exchanges. Since Medicaid/CHIP and exchange subsidies are funded by tax dollars, the CBO projected that HR 2575 would increase the budget deficit by nearly $74 billion from 2015 to 2025.
- If employers are likely to cut employee hours to avoid the employer mandate, the problem would be more significant if HR 2575 redefined full time as 40 hours per week. Most workers put in at least 35 to 40 hours per week. While it would be problematic for employers to reduce a worker’s hours from 40 to 29, it would be much more realistic to expect that someone working 40 hours might see their hours cut down to 39 – along with a loss of health insurance coverage.
- Very few employers have to make changes as a result of the ACA’s shared-responsibility provision. Most large employers already offer coverage to their workers, and small businesses arent required to offer coverage under the law. HR 2575 is seen by some as an implications that the employer shared-responsibility mandate is a significant burden on employers, but most employers already comply with the existing rules.
- Opponents of HR 2575 see the legislation as a thinly veiled attempt to undermine the ACA.
|04/03/2014||Status: House passed|
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