House Passes Bill Repealing PPACA’s 30-Hour Rule

House lawmakers on January 8 approved, by a vote of 252 to 172, the Save American Workers Bill of 2015 (HR 30), which would alter the calculation under the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148 ) of the number of full-time equivalent employees for the purposes of determining which employers are subject to penalties. The Senate is expected to soon take up a companion measure but the fate of the measure is uncertain as President Obama has issued a veto threat if the bill comes to his desk.

Specifically, the bill would change the definition of full-time employment from 30 hours per week under current law to 40 hours per week. The Obama administration, however, said that the legislation would weaken a provision of the PPACA designed to maintain employer-based health insurance coverage, protect their employees and prevent employers’ health benefit costs from being shifted to taxpayers. According to new estimates from the Congressional Budget Office CBO), it would increase the budget deficit by $53.2 billion over 10 years, reduce the number of people receiving employer-based health insurance coverage and increase the number of individuals who are uninsured.

Senate Majority Leader Mitch McConnell, R-Ky., brushed off the CBO’s dire warnings, saying the Senate would, at some point, hold a vote on repealing the rule. “One of the worst things we can do is destroy the 40-hour work week, which has been a part of American culture and life for a very long time,” said McConnell. “It is wreaking havoc out in society, regardless of what the congressional budget view may be of the impact on the U.S. budget. We know the impact on family budgets, and it’s not good.”

Senate Minority Whip Richard Durbin, R-Ill., said that Republicans were “pursuing an extreme bill that undermines the Affordable Care Act.” He noted that it is likely to come to the Senate soon and to his knowledge, it is considered “a high priority by the new majority in the Senate.” In fact, a bipartisan bill has already been introduced. On January 7 Sens. Susan Collins, R-Me., Joe Donnelly, D–Ind., Lisa Murkowski, R-Ark., and Joe Manchin, D-W.Va., announced the reintroduction of the bipartisan Forty Hours is Full Time Bill (Sen 30), which would also change the definition of a “full-time employee” under the PPACA to someone who works an average of 40 hours per week.

The lawmakers said they have heard firsthand that some employers are deciding to cut employees’ hours due to how the health care law defines a “full-time employee” as someone who works an average of 30 hours per week. “Our legislation is very straightforward and would remedy a serious flaw in the Affordable Care Act that is causing workers to have their hours reduced and their pay cut,” said Collins. “The law creates a perverse incentive for businesses to cut their employees’ hours so they are no longer considered ‘full time.’”

James A. Klein, president of the American Benefits Council, said that part of the problem is that the employer mandate creates an administrative burden for employers. “Because final regulations implementing the employer mandate include many complex standards for determining whether an individual is a ‘full-time employee,’ passage of HR 30 is one helpful step Congress can take to alleviate employer concerns,” Klein said. “Many employers are concerned that, despite best efforts to comply with the law, they could be subject to penalties given the complexity of administering coverage to comply with the law, particularly with respect to employees who work a variable schedule, short-term employees, temporary, seasonal or similar contingent workers,” Klein said.

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