A panel of the House of Representatives approved legislation Tuesday to 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 2015, to offer qualified coverage to full-time employees – defined as those working an average of 30 hours per week – or be liable for an annual $2,000 penalty per employee.
The legislation, H.R. 2575, introduced by Rep. Todd Young, R-Ind., and approved by the Ways and Means Committee on a 23-14 vote, would change the definition of full-time employees to those working an average of 40 hours per week.
“This legislation restores a common understanding in America, spanning over half a century, of what constitutes full-time work. In other words, it restores a basic American value,” Rep. Dave Camp, R-Mich., the committee’s chairman, said in a statement prior to the panel vote.
In addition, even before the provision’s 2015 effective date, employers are cutting back employees’ hours below the 30-hour penalty trigger, Rep. Camp said.
But ranking member Rep. Sander Levin, D-Mich., said the bill would be a “tremendous step backwards for millions of hard-working Americans.”
The health care reform law’s “use of a 30-hour standard to define full-time was set to minimize gamesmanship and incentives that might tempt some employers to reduce hours in order to avoid their responsibility to offer affordable coverage,” Rep. Levin said in a statement.
The measure now goes to the full House. A similar bill, S. 1188, introduced last year in the Senate by Sen. Susan Collins, R-Maine, has been referred to but not acted on by the Finance Committee.
Source: Business Insurance Magazine, February 4, 2014