Some small-business owners are hopeful that a new Congress
will change the federal health law’s requirement that businesses provide health
insurance to workers who clock as little as 30 hours a week, or pay a penalty. Republicans
taking over control of the Senate would like to extend the law’s
definition of a full-time workweek to 40 hours or more. That move, which would
require President Barack Obama ’s approval, could benefit companies with
300 employees.
Starting next year, companies with at least 100 full-time
workers, are required to offer health coverage—or face fines, ranging from
$2,000 to $3,000 per employee. Those with at least 50 full-time workers must
provide coverage to their full-timers by 2016, or risk facing the penalties.
About 40% of American Leisure’s employees work between 30
and 40 hours a week, while just over half work more than 40 hours. With the
law’s current definition of a full-time workweek at 30 hours, he is likely to
reduce the weekly hours for many of his employees.
Most Americans work 40 or more hours weekly. Of the roughly
144 million people with jobs in the U.S. in October, about 46.6 million, or
32%, worked between one and 39 hours a week, while 97.2 million worked 40 hours
or more, according to the U.S. Bureau of Labor Statistics. Indeed, that agency
defines part-time as less than 35 hours weekly.
The GOP-controlled House of Representatives, in an April
vote, backed raising what qualifies as a full-time workweek under the health
law to 40 hours a week, from 30, though Mr. Obama at the time threatened to
veto the change. In the wake of last week’s election, House Speaker John
Boehner said that the 40-hour definition remained one of his top agenda
items for the new Congress.
Mr. Kass’s firm, which operates fitness clubs, pools and
spas in residential buildings and hotels, currently offers an
employer-sponsored plan to all its full-time workers, covering 20% to over 50%
of their monthly insurance costs. Less than half have signed on to the plan. He
worries that at least some of his employees, especially those earning $15 an
hour, may be eligible to receive subsidies for individual plans they purchase
from the state health-insurance exchanges, if the company’s health plan costs
more than 9.5% of their income.
For every full-time employee who receives such subsidies,
the company may face a $3,000 fine, for instance. Consequently, extending the
definition of the full-time to 40 hours will put his business “in much better
shape” next year, he says. If fewer of his employees were considered full
timers, the penalties his business would face would then be significantly less.
The law exempts businesses of all sizes from having to offer
coverage to part-timers working less than 30 hours weekly. It also doesn’t
require businesses with fewer than 50 full-time workers to offer employee
health coverage to employees.
Critics of a 30-hour workweek threshold for full timers say
they worry that smaller employers—but who still employ at least 50 full-time
workers—may seek to cut back their workers’ hours, in an attempt to avoid the
health law’s requirements altogether.
To be sure, there is scant evidence so far that employers
are cutting workers’ hours in response to the health law, though part-time
employment rates remain high in the wake of the recession, says Elise
Gould, a senior economist with the Economic Policy Institute. In fact, some
economists argue that raising the full-time worker measure to 40 hours a week
will have an even bigger impact on workers’ hours.
The proposal to raise the full-time workweek definition to
40 hours for the purposes of the health law would likely require support from
at least 60 votes in the Senate. Republicans have locked in 53 seats for the
new year.
The measure has already garnered support from two Senate
Democrats, Joe Manchin of West Virginia and Joe Donnelly of Indiana. Supporters
of the move are also eyeing Virginia Democratic Sen. Mark Warner and whoever
wins Louisiana’s Dec. 6 runoff. Employer trade associations say they will
launch new campaigns in states where they think they can pick up additional
Democrats.
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