One of the big Affordable Care Act headlines this week is whether the definition of a full-time worker will be changed from 30 hours a week to 40 hours a week.
Last Thursday, the House of Representatives passed legislation that would change the law's definition of full-time work to 40 hours a week. If passed by the Senate and signed into law, this would reduce the number of workers to whom employers would have to offer health insurance under the law’s employer mandate. Here’s what you need to know about the headlines, and the legislation.
H.R. 30 Would Change the Definition of a Full-Time Worker from 30 Hours to 40 Hours
On Thursday, January 8th, the House of Representatives passed H.R. 30. The bill amends the Internal Revenue Code to change the definition of a "full-time employee," for purposes of the Affordable Care Act’s employer mandate.
Under the employer mandate, applicable large employers (with more than 50 FTE employees) are required to offer health insurance coverage to full time workers, as defined by working on average at least 30 hours of service in a week.
Supporters of the legislation argue that by requiring companies to offer health insurance coverage to employees working 30 or more hours, there is an incentive for employers to reduce workers' hours to below 30 per week. If workers are not considered full time employees, employers can avoid providing health coverage or avoid paying a fine.
The measure passed 252-172 in the House of Representatives Thursday and now moves to the Senate. The White House has said if the bill reaches President Obama's desk, he will veto it.
Last spring similar legislation was introduced, but stalled in the Senate.
About the Employer Mandate
The ACA’s employer mandate (also called the Employer Shared Responsibility Fee) begins in 2015 for employers with 50 or more full-time equivalent workers. This year, however, is a phase-in year as there is some transitional relief for employers in 2015.
For 2015, if an employer with at least 50 full-time employees (including full-time equivalents) does not offer "minimum essential" and "affordable" coverage -- or offers coverage to fewer than 70% of its full-time employees (and their dependents) -- the employer will owe an Employer Shared Responsibility fee IF one of their employees purchases a health plan through the exchanges and receives a federal tax credit or subsidy. Read more about the fee here.
Do you think Congress should change the definition of full time workers from 30 hours a week to 40 hours a week? Let us know your thoughts in the comments below.