Businesses urge change to Obamacare's insurance mandate

January 29, 2014 by Karen Pallarito, Healthday Reporter
Businesses urge change to obamacare's insurance mandate
House panel members spar over claim that provision of health-reform law is a 'job killer.'

(HealthDay)—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 to full-time workers, and requiring them to pay penalties if they don't, is one way the Affordable Care Act expands coverage to uninsured Americans.

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 representatives urged Congress to replace the so-called "30-hour rule" because of the expense and difficulty implementing the requirement.

"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 Franchise Association.

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 said.

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 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 Commerce survey.

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 health-reform law.

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, Levin said.

Washington Democrat Jim McDermott put it more bluntly: That businesses are being forced to cut hours due to Obamacare is a "preposterous accusation."

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 at 40 hours. The measure has 192 Republican co-sponsors.

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 impact.

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 said.

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.

Explore further: White House delays key element of health care law

More information: For more on the employer responsibility provision, go to HealthCare.gov.

Related Stories

White House delays key element of health care law

July 3, 2013
President Barack Obama's health care law, hailed as his most significant legislative achievement, seems to be losing much of its sweep.

Affordable Care Act unlikely to push employers to drop health insurance coverage

October 15, 2013
In the race for the best workers, small firms have always been at a bit of a competitive disadvantage when it comes to benefits they can offer.

HEALTH REFORM: Expect pluses, minuses for those with job-based coverage

September 24, 2013
(HealthDay)—The Obama administration's sweeping health reform law known as the Affordable Care Act goes well beyond helping America's uninsured. It also affects roughly 159 million workers and family members who now have ...

HEALTH REFORM: If you're an uninsured worker, it's your chance to get covered

September 25, 2013
(HealthDay)—Craig Smith is a 32-year-old Ph.D. candidate in religious education who doesn't really know what the new health insurance exchanges will offer or what the coverage will cost. But he's eager to find out.

US delays health care law mandate until 2015

July 3, 2013
President Barack Obama's administration announced Tuesday it will not enforce part of the federal health care law until 2015, delaying penalties on employers who do not provide health insurance for workers.

Loopholes in health care law could result in employee harassment

July 23, 2013
The contrasting incentives of employers and employees under the Affordable Care Act ultimately may result in increased employee harassment and retaliation claims, two University of Illinois law professors say in a paper they ...

Recommended for you

Americans are getting more sleep

January 19, 2018
Although more than one in three Americans still don't get enough sleep, a new analysis shows first signs of success in the fight for more shut eye. According to data from 181,335 respondents aged 15 and older who participated ...

Wine is good for you—to a point

January 18, 2018
The Mediterranean diet has become synonymous with healthy eating, but there's one thing in it that stands out: It's cool to drink wine.

Sleep better, lose weight?

January 17, 2018
(HealthDay)—Sleeplessness could cost you when it's time to stand on your bathroom scale, a new British study suggests.

Who uses phone apps to track sleep habits? Mostly the healthy and wealthy in US

January 16, 2018
The profile of most Americans who use popular mobile phone apps that track sleep habits is that they are relatively affluent, claim to eat well, and say they are in good health, even if some of them tend to smoke.

Improvements in mortality rates are slowed by rise in obesity in the United States

January 15, 2018
With countless medical advances and efforts to curb smoking, one might expect that life expectancy in the United States would improve. Yet according to recent studies, there's been a reduction in the rate of improvement in ...

Can muesli help against arthritis?

January 15, 2018
It is well known that healthy eating increases a general sense of wellbeing. Researchers at Friedrich-Alexander-Universität Erlangen-Nürnberg (FAU) have now discovered that a fibre-rich diet can have a positive influence ...

0 comments

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.