February 4, 2014

The 40-Hour Hearing

Don’t worry, the hearing didn’t actually last for 40 hours, but the House Ways and Means Committee did host a full committee hearing on PPACA’s 40-hour rule earlier this week. As you all know, PPACA’s definition of a full-time employee has caused many employers and employees quite the headache. Beginning in 2015, PPACA will require employers subject to the employer shared responsibility provisions (aka employer mandate) to provide insurance to employees who work more than 30 hours a week or face potential penalties. The change in definition of a full-time employee for the purposes of healthcare coverage offerings will totally undercut the traditional workweek, discarding over a half a century of enforced labor policy and force employers to cap or reduce hours to avoid the mandate, which many employers toying with this decision do not want to do.

Legislation that would change the definition of a full-time employee under PPACA back to 40 hours has been introduced in the House and Senate. Senators Susan Collins (R-ME) and Joe Donnelly (D-IN) are bipartisan sponsors of a Senate bill. Over in the more dysfunctional House, there are actually two virtually identical bills pending on the topic. Representative Todd Young (R-IN) dropped a 30-hour repeal bill in the House over the summer with over 100 Republican co-signers. In typical Washington DC fashion, another 30-hour repeal bill was dropped in the House by Representative Dan Lipinski (D-IL) a few days later with several Democrats co-signing and just a few Republicans.

The hearing on the issue this week featured testimonies from Lanhee J. Chen, Ph.D., research fellow, Hoover Institution, Stanford University, Peter Anastos, owner and co-founder, Maine Course Hospitality Group, Neil Trautwein, vice president and employee benefits counsel, National Retail Federation, Thomas J. Snyder, president, Ivy Tech Community College and Helen Levy, Ph.D., research associate professor, Institute for Social Research, University of Michigan. As expected, the industry representatives critiqued the 30-hour rule, highlighting how it will negatively impact workers, especially those working in restaurants, retail stores and hotels. Because providing health insurance coverage is a great expense to employers, many will be forced to cut worker hours, not because they necessarily want to, but because they simply cannot afford not to. Witness Peter Anastos told the committee about his plans to expand his hotel business across the county and how the rule was seriously hurting his ability to do so, specifically citing how the math just doesn’t work. Peter was quoted saying, “… you’re talking about a $10- or $12-an-hour employee, and then it’s going to cost $4,000 or $5,000 just to raise them up a couple of hours, it makes it extremely difficult to do.”

Supporters of the rule claim that changing the standard to 40-hours-per-week will widen the pool of workers vulnerable to hour cuts and that changing the definition of full-time work could also raise the overall cost of the PPACA.

Source article: Nahu Washington Update