Committee approves full-time worker bill

Originally posted February 04, 2014 by Allison Bell on

Members of the House Ways and Means Committee today voted 23-14 to pass H.R. 2575, the Save American Workers Act bill.

For purposes of applying the Patient Protection and Affordable Care Act employer “shared responsibility” coverage mandate, the bill would define a full-time worker as an employee who works 40 hours or more per week.

PPACA now defines a full-time employee as an employee who works 30 or more hours per week.

PPACA requires employers that have the equivalent of 50 or more full-time employees to provide a minimum level of health coverage if one or more workers apply for coverage from a PPACA health insurance exchange.

Part-time workers count when employers are calculating the number of full-time equivalents they have, but employers subject to the PPACA “play or pay” mandate penalties tied to the number of actual full-time workers they have. When employers are calculating the actual penalty payment amounts, they can exclude part-time workers.

Rep. Todd Young, R-Ind., the sponsor, said the 30-hour limit is encouraging many employers to limit hours to avoid penalties.

“An employee seeing their hours cut from 39 hours to 29 hours will lose an entire week’s paycheck over the course of a month,” Young said.

Democrats on the committee said the bill would gut the coverage mandate by letting employers classify workers who work as many as 39 hours per week as part-time workers.

Rep. Xavier Becerra, D-Calif., noted that Ways and Means leaders gave the bipartisan Joint Committee on Taxation only a week to analyze the bill.

Budget analysts have not yet estimated how the bill might affect federal spending, taxes or the federal budget deficit, Becerra said.

“We’re essentially voting in the blind,” Becerra said.


House bill would change PPACA definition of full-time employee

Originally posted by Jerry Geisel on

Legislation introduced in the House of Representatives last Friday would ease the health care reform law's definition of a full-time employee, shielding more employers from a stiff financial penalty imposed by the law.

Under the Patient Protection and Affordable Care Act, employers are required effective in 2014 to offer qualified coverage to full-time employees — defined as those working an average of 30 hours per week — or be liable for a $2,000 penalty per employee.

The legislation, H.R. 2575, introduced by Rep. Todd Young, R-Ind., would change the definition of full-time employees to those working an average of 40 hours per week.

Repealing the 30-hour definition of a full-time employee “and restoring it to the historical norm ensures this bill not only protects working poor and middle class employees, it also ensures that laws governing employment are consistent,” Rep. Young said in a statement.

The introduction of the measure comes one year to the day of the 2012 U.S. Supreme Court ruling upholding the constitutionality of the health care reform law provision requiring most Americans to enroll in a health care plan or pay a tax, effective Jan. 1, 2014.

More Guidance on "Full-Time" Employees and 90-Day Waiting Period

Starting in 2014, larger employers (generally, those with 50 or more employees) may face "shared responsibility" penalties if any of their "full-time" employees receive subsidized health coverage through an "Affordable Insurance Exchange."  At the same time, virtually all employer health plans will become subject to a 90-day limit on any eligibility waiting period.  On August 31, the agencies charged with implementing health care reform issued additional guidance on both of these requirements.

In Notice 2012-58, the IRS outlines several safe-harbor methods for determining whether "variable hour" or seasonal employees fall within the "full-time" category (which is generally defined as working 30 or more hours per week).  And in Notice 2012-59, the IRS explains how the maximum 90-day eligibility waiting period is affected by various types of eligibility conditions.  (Notice 2012-59 was also issued in virtually identical form by both the Department of Labor - as Technical Release 2012-02 - and the Department of Health and Human Services.)