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U.S. House of Representatives Passes Bill to Change Definition of Full Time Employee under ACA

January 21 - Posted at 3:00 PM Tagged: , , , , , , , , , , , , , ,

Members of the U.S. House of Representatives voted on January 8, 2015 to redefine full-time employment under the Affordable Care Act (ACA) to employees who work at least 40 hours a week rather than 30 hours a week.


The Save American Workers Act, passed the House with a vote of 252-172 with full Republican support and 12 Democratic voters. The legislation would amend the Internal Revenue Code by changing the definition of full-time employee to cover individuals who work, on average, at least 40 hours per week for purposes of the employer mandate to provide minimum essential health care coverage under the ACA.  


Despite the bill’s passage in the House, the fate of the bill in the U.S. Senate remains uncertain. In addition, Republicans have not garnered enough support to override the veto promised by President Obama if the bill did pass Congress.  


According to Politico, “The House has cleared more than 50 assorted measures to repeal or roll back Obamacare, but this is the first time the House can propel legislation to a GOP-controlled Senate, potentially forcing President Barack Obama to either accept changes to his signature domestic achievement or use his veto power.”  


Some supporters of the change, including the U.S. Chamber of Commerce, argue that the current standard deviates from the widely accepted definition of full-time work. It is argued that it provides an incentive for employers to reduce hours, particularly for low-wage workers, to avoid offering healthcare coverage.


This month, employers with 100 or more employees will be required to offer health insurance to at least 70% of employees who works at least 30 hours a week or else pay a penalty.


The NY Times comments: 

By adjusting that threshold to 40 hours, Republicans — strongly backed by a number of business groups — said that they would re-establish the traditional 40-hour workweek and prevent businesses cutting costs from radically trimming worker hours to avoid mandatory insurance coverage. They contend that the most vulnerable workers are low-skilled and underpaid, working 30 to 35 hours a week, and now facing cuts to 29 hours or less so their employers do not have to insure them. With passage of the law, those workers would not have to get employer-sponsored health care, and their workweek would remain intact.



Analysis by the Congressional Budget Office found that the bill would increase the U.S. deficit by $53 billion over the course of a decade because fewer employers would pay penalties and one million employees would not have coverage through their job. Democrats cite these reasons as evidence that the bill is simply an attempt to dismantle the ACA.


A central issue of this bill is how far employers would go to avoid mandated coverage. A majority of employees already work 40 hours a week rather than 30. That being said, few employers would cut worker hours from 40 to 29, but many would be willing to cut hours from 40 to 39, the New York Times ventures, “That means raising the definition of a full-time worker under the health care law would put far more workers at risk.”

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