On January 8, 2015, the U.S. House of Representatives passed a bill changing the definition of a full-time employee under the Affordable Care Act (ACA) from a person who works 30 hours per week to one who work 40 hours per week. This change is significant because the ACA requires businesses with 50 or more employees to offer health insurance to their full-time employees or pay a penalty. The 40-hour per week definition would bring the ACA in alignment with other state and federal laws, such as the Fair Labor Standards Act.
Proponents of the bill, called the Save American Workers Act, argue that the current 30-hour threshold pressures businesses to save money by either reducing employees’ hours to avoid mandatory insurance coverage or laying off employees altogether. The Obama administration strongly opposes the legislation on the grounds that it would reduce the number of Americans with health insurance coverage. Additionally, a recent report by the Congressional Budget Office concluded that the bill would add to the federal deficit by decreasing employer penalties for noncompliance with the ACA and increasing the number of persons receiving government-subsidized health insurance instead of employer-provided coverage.
The bill easily passed the House by a vote of 252-172, but it will face increased opposition in the Senate, where Republicans will need 60 votes to overcome a filibuster by Senate Democrats. Further, President Obama has threated to veto the bill if it passes.
The Save American Workers Act is the latest attempt by House Republicans to chip away at the Affordable Care Act. Since taking office earlier this year, the House has also passed legislation exempting emergency service volunteers and employees that receive insurance from the Veterans Administration from being counted towards the ACA’s 50-employee threshold.