Bill bumping ACA to 40-hour work week passes House

Originally posted April 4, 2014 by Melissa A. Winn on http://eba.benefitnews.com

The U.S. House of Representatives on Thursday passed legislation that would modify the Affordable Care Act’s definition of a full-time employee from one who works 30-hours a week to one who works 40-hours a week.

The 248 to 179 vote was largely along party lines, with 18 Democrats joining a unanimous block of 230 Republicans to support the bill, H.R. 2575, also known as the Save American Workers Act of 2013.

The Big “I” applauded the bill’s passage, calling it a “common-sense fix.”

“Independent agencies serve many clients who have struggled with the prospect of complying with the employer mandate, and in particular the 30 hour per week definition of a full-time employee,” says Robert Rusbuldt, president and CEO of the Big “I.”

The law’s opponents argue the ACA’s current definition encourages employers to limit employees’ work hours to less than 30 a week to avoid the employer mandate requiring employers with 50 or more full-time workers to provide affordable health care coverage to their employees.

“Implementation of the employer mandate has caused many businesses to undergo the prospect of great financial strain or to contemplate dropping their health care plan altogether,” says Charles Symington, Big “I” senior vice president for external and governmental affairs.

The Big “I” believes this new legislation “would provide much-needed relief for job creators,” he says.

The White House on Tuesday threatened to veto the bill, citing a Congressional Budget Office analysis released in Feb. that found the legislation would increase the deficit by $74 billion and reduce the number of people receiving employment-based health coverage by about one million people. The vote is largely symbolic as it is not expected to make headway in the Democratic-controlled Senate.

 


Committee approves full-time worker bill

Originally posted February 04, 2014 by Allison Bell on http://www.benefitspro.com

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.

 


Healthcare Reform Curbs Full-Time Hiring

Originally posted December 12, 2013 by Jon Jimison on http://medcitynews.com

Almost half of U.S. companies are wary of taking on full-time employees as a result of the Affordable Care Act.

And 20 percent are likely to hire fewer employees while 10 percent may actually lay off employees in response to what's been dubbed "Obamacare."

That's according to the findings from Duke University/CFO Magazine's Global Business Outlook Survey, which was concluded Dec. 5.

The survey found American chief financial officials indicated that because of the Affordable Care Act, they may reduce employment growth or even shift toward part-time employees. In fact, more than 40 percent of companies will consider targeting part-time workers for future employment, the survey found.

"These are some negative, perhaps, unintended consequences of the Affordable Care Act that companies are wrestling with right now that might dampen the hiring horizon a bit," said John Graham, Duke Fuqua School of Business finance professor and a director of the survey.

There was, however, a silver lining in the survey. It found that underlying economic conditions are expected to improve next year. Fifty-two percent of U.S. business leaders believe economic conditions for their firms will be better in 2014.

There will still be some expected employment growth, but health care reform has reduced that growth from what it could have been, Graham reported.

Capital spending among businesses might fare better, increasing up to 7 percent next year.

President Barack Obama's signature 2010 health care law requires many companies to provide insurance to all full-time workers, which the law defines as those who work 30 or more hours per week. Some businesses reportedly have given part-time schedules to their former full-time staffers to skirt insurance requirements.

Larger companies that employ 50 or more people are required to provide health insurance under the law. Smaller companies can opt out.

"The inadequacies of the ACA website have grabbed a lot of attention, even though many of those issues have been or can be fixed," Graham said. "Our survey points to a more detrimental and potentially long-lasting problem. An unintended consequence of the Affordable Care Act will be a reduction in full-time employment growth in the United States. Companies plan to increase full-time employment by 1.4 percent in 2014, a rate of growth which is down from last quarter and unlikely to put a dent in the unemployment rate. CFOs indicate that full-time employment growth would be stronger in the absence of the ACA."

"I doubt the advocates of this legislation would have foretold the negative impact on employment," said Campbell Harvey, finance professor at Fuqua and a director of the survey. "The impact on the real economy is startling. Nearly one-third of firms may either terminate employees or hire fewer people in the future as a direct result of ACA."

Health care in a top local concern as well, officials have said.

Changes to health insurance requirements top the list of concerns for local businesses, Christy Proctor, Wilson Chamber of Commerce chairwoman-elect, previously said.

Most Americans will be required to have health insurance in 2014 under the Affordable Care Act. The law requires coverage and includes fines for not getting insurance. There are subsidies for people who fall below certain income levels. Under the law, residents can't be refused coverage for a pre-existing condition.

The issue has become a heated political debate.

Republicans are quick to point out problems with the government-run website. They also point out Department of Health and Human Services enrollment data showing that fewer than 9,000 North Carolinians enrolled from Oct. 1 to Nov. 30.

Democratic Sen. Kay R. Hagan said she and others called for an investigation into the contracting process related to healthcare.gov">healthcare.gov. HHS Secretary Kathleen Sebelius on Wednesdsay announced that the inspector general of the agency will conduct such an investigation.

"I am pleased that the administration has agreed to investigate the contracting process related to healthcare.gov as I urged them to do last month," Hagan said in a statement. "There is no excuse for not having the website ready from day one, and we must learn whatever lessons we can to ensure we never again have an issue like the initial failures of healthcare.gov">healthcare.gov. I will continue to monitor the progress of this investigation to ensure it is completed in a timely and transparent manner."

 

 


Large employers won't cut worker hours due to PPACA

Original article from http://www.businessinsurance.com

By Jerry Geisel

Nearly all large employers are not considering reducing the number of hours employees work in response to the health care reform law, according to a survey released Thursday.

Ninety-eight percent of employers surveyed by Towers Watson & Co. said they have not and are not considering asking full-time employees to move to part-time status due to the Patient Protection and Affordable Care Act.

Under the health care reform law, employers must extend coverage to employees working at least 30 hours a week starting next year or pay a $2,000 penalty for each full-time employee.

The threat of the penalty has led to numerous predictions that some employers would reduce hours of employees now working at least 30 hours per week who are not offered health care plan coverage to avoid the penalty in the future.

But few employers appear willing to take such action.

“It's clear that most employers are hesitant to rush and implement changes that will negatively affect workers,” Laura Sejen, New York-based global head of rewards for Towers Watson, said in a statement.

In fact, some employers are easing health care plan eligibility requirements. Earlier this week, for example, Cumberland Gulf Group of Framingham, Mass., said employees working as few as 32 hours a week will be eligible for group coverage effective Oct. 1, down from the current 40-hour-a-week requirement.

The Towers Watson survey is based on the responses of 113 employers, all of which have at least 1,000 employees.

 

 

 


A walk-through on full-time vs. part-time for PPACA

Source: http://eba.benefitnews.com

By L. Scott Austin and David Mustone

With a substantial portion of the Patient Protection and Affordable Care Act set to go into effect in 2014, employers are working to determine how the law will impact them, their business and their employees. Because the law will require most employers to provide affordable minimum essential health insurance coverage to full-time employees or face financial penalties, employers must understand how the law defines full-time workers, as well as the penalties that businesses can face for failing to comply or choosing not to provide coverage.

Under provisions called the employer shared responsibility rules, the PPACA requires large employers (generally those with 50 or more full-time employees) to provide affordable group health coverage with sufficient value to full-time employees and their dependents. Full-time employees are generally defined as those who work on average at least 30 hours per week. Employers that fail to comply with these rules can face penalties.

What are the potential penalties?

The failure to offer coverage penalty applies if at least one full-time employee obtains subsidized coverage on an exchange where the employer does not offer coverage to at least 95% of its full-time employees and their dependents. This penalty – which can be up to $2,000 per year for each full-time employee (in excess of 30) – will be based on the total number of full-time employees an employer has, regardless of how many employees have government-subsidized exchange coverage.

The insufficient coverage penalty applies if the employer offers full-time employees coverage, but the coverage is either unaffordable (individual premium cost exceeds 9.5% of the employee’s household income) or does not provide minimum value (plan pays less than 60%of the covered costs). Proposed regulations released by the IRS provide guidance and alternative safe harbors for calculating whether health coverage is unaffordable, including use of an employee’s W-2 earnings. The potential penalty for insufficient coverage is $3,000 per year for each employee who obtains government-subsidized coverage on an exchange.

Employers also should note that in determining whether an employer is subject to these provisions (i.e., is a “large employer”), the IRS controlled group rules are applied – meaning that all affiliated employers for which there is 80% or greater common ownership will be treated as a single employer. However, compliance with the employer shared responsibility rules – and any associated penalties – will generally be assessed on an employer-by-employer basis.

Who is considered a full-time employee?

As an employer, the determination of who is a full-time employee will be crucial in evaluating your options for complying with the employer shared responsibility rules, and equally important, designing your group health plan’s eligibility and participation requirements.

Because there can be various ways of assessing what constitutes a full-time employee eligible for coverage under the PPACA, the IRS has issued guidance in the form of several notices, as well as temporary regulations. These guidelines set out criteria and standards that can help employers make accurate determinations when hiring new employees, including:

  • Initial measurement period – A designated period of not less than three months or more than 12 months used in determining whether a newly hired variable or seasonal employee is full-time.
  • Standard measurement period – An annual designated period of not less than three months or more than 12 months used to determine whether an ongoing variable or seasonal employee is full-time.
  • Administrative period – A period of up to 90 days for making full-time determinations and offering/implementing full-time employee coverage.
  • Stability period – An annual designated period of not less than six months (and not less than the corresponding measurement period) during which the employer must offer affordable minimum essential health coverage to all full-time employees, or face financial penalties for not doing so.
  • Full-time employees – If a new employee is reasonably expected to average at least 30 hours per week at the time of hire, the employee must automatically be treated as full-time and offered group health coverage within three months of hire.
  • Variable hour and seasonal employees – A variable hour employee is someone whom the employer cannot reasonably determine will average at least 30 hours per week at the time of hire. No definition is provided for a seasonal employee, but presumably it would include anyone who works on a seasonal basis. Employers may use the initial measurement period to determine whether a newly hired variable or seasonal employee actually averages at least 30 hours per week, and the standard measurement period to determine whether an ongoing variable or seasonable employee actually averages at least 30 hours per week. If the employee does average at least 30 hours per week during the initial measurement period or standard measurement period, the employer must offer affordable minimum essential health coverage during the stability period, or face financial penalties for not doing so.
  • Transition from new to ongoing employee status – Once a new employee has completed an initial measurement period and has been employed for a full standard measurement period, the employee must be tested for full-time status under the ongoing employee rules for that standard measurement period, regardless of whether the employee was full-time during the initial measurement period.