Businesses and workers concerned that the definition of “full-time” employment as 30 hours per week in the “pay-or-play” penalties of the Patient Protection and Affordable Care Act (commonly referred to by the public as “Obamacare”) is hurting American workers may want to share their input on recently introduced legislation that would raise the number of hours an employee must work to qualify as “full-time” for purposes of the pay-or-pay penalty from 30 to 40 hours per week with members of the key Congressional Committees that will decide whether this legislation advances when Congress returns from its Summer vacation.
Growing concern about the costs and other implications of Obamacare are fueling renewed debate in Congress about the pay-or-play and other provisions of Obamacare. Only 57 days before enrollment in coverage slated to be available as an alternative to employer coverage beginning January 1, 2014 through new federally mandated health insurance exchanges is prompting renewed debate in Congress about the full-time employee, pay-or play and other provisions of Obamacare. As Congress takes its summer break, both sides are talking and listening to voters about health care reform. Concerned parties should share their input on Congress during this break to help shape the decisions Congress makes when it returns to work in September.
“Full-Time Employee” Definition Key Element Of Employer’s “Pay-Or Play” Liability
Originally scheduled to take effect on January 1, 2014 until the Administration on July 2, 2013 announced it would not enforce its provisions until 2015, the employer “shared responsibility” or “pay-or-play” rules of Internal Revenue Code (Code) Section 4980H enacted as part of Obamacare have been widely criticized as killing jobs and reducing employment.
When effective, Code Section 4980H will require that businesses employing 50 or more “full-time” employees (Large Employers”) pay a tax penalty calculated in accordance with Code Section 4980H unless the Large Employer offers each “full-time employee” the opportunity to enroll himself and each of his dependent children in coverage under a qualifying health plan that meets the minimum essential coverage, minimum value and affordability standards of Obamacare.
Under the current provisions of Code Section 4980H, the amount of the penalty that a Large Employer must pay is:
- $168 per employee per month for any month that the employer doesn’t offer minimum essential coverage to each full-time employee and has at least one full-time employee who receives a subsidy or tax credit for enrolling in coverage under one of the health insurance exchanges created by Obamacare (Subsidized Employee);
- $250 per employee month multiplied by the number of full-time employees of the business that are Subsidized Employees if the employer offers coverage under the health plan that provides minimum essential coverage but the health plan fails to meet the minimum value or affordability standards of Code Section 4980H; or
- $0 if the employer either offers health plan coverage that meets the minimum essential coverage, minimum value and affordability requirements of Code Section 4980H or doesn’t have any full-time employees who are Subsidized Employees.
30-Hour Full-Time Definition Reducing Full-Time Employment Opportunities
As the original January 1, 2014 implementation date of Code Section 4980H has approached, original largely Republican concern about its unintended adverse impact on employment increasingly has grown amid widespread reports that businesses are avoiding hiring and reducing employee hours to minimize exposures to Code Section 4980H-driven costs. See, e.g. Obamacare’s Employer Penalty And Its Impact On Temporary Workers; States Cutting Employee Hours To Avoid Obama Care Costs; Americans Who Voted For Obama Now Seeing Weekly Job Hours Slashed Below 30 As Obamacare Kicks In. Particularly embarrassing among these reports include the recent report that even a call center hired by the Administration to help promote enrollment coverage offered through the Obamacare-created exchanges is limiting the hours its employees can work to under 30 hours per week. ObamaCare Call Center To Keep Employees Under 30 Hours/Week.
As businesses already struggling to deal with a tough economy moved to minimize the number of their full-time employees, even labor unions that originally supported Obamacare joined the cry for reform of its provisions to mitigate employment losses resulting from employer efforts to minimize Code Section 4980H exposures. See Companies Cut Hours Of Full-Time Employees To Avoid Providing Health Care Under New Rules.
S. 1188/H.R. 2575 Would Make Full-Time Mean 40 Hours Per Week
Prompted by growing concern about the apparent adverse impact of Obamacare on job opportunities for hourly workers, legislation now is pending in both the House and Senate to amend the Obamacare’s definition of “full-time.” In June, Senators Susan Collins (R-ME) and Joe Donnelly (D-IN) Collins introduced a bill to amend Code Section 4980H to change the definition of full-time employee for purpose of the shared responsibility provisions of Obamacare, S. 1188: Forty Hours Is Full Time Act to change the definition of “full-time” from 30 to 40 hours per week and the number of hours counted toward a “full-time equivalent” employee to 174 hours per month. Representative Todd Young (R-IN) then introduced a similar provision in the House on June 28, 2013, H.R. 2575, Save American Workers Act of 2013.
H.R. 2575 has garnered the support of 144 Cosponsors. H.R. 2575. Following its introduction, the House assigned H.R. 2575 to the House Ways and Means Committee, whose members now must decide when and if the bill will advance in the House. Key members of the House Ways and Means Committee who will make this decision on include the following Committee Members: Dave Camp; Sander Levin; Charles Boustany Jr.; Kevin Brady (Chair, Subcommittee on Health); Sam Johnson; Devin Nunes; David Reichert (Chair, Subcommittee on Human Resources); Patrick “Pat” Tiberi; Xavier Becerra; Diane Black Earl Blumenauer; Vern Buchanan; Joseph Crowley; Danny Davis; Lloyd Doggett; Jim Gerlach; Tim Griffin; Lynn Jenkins; Mike Kelly; Ron Kind; John Larson; John Lewis; Kenny Marchant; Jim McDermott; Richard Neal; Bill Pascrell Jr.; Erik Paulsen; Tom Price; Charles Rangel; Tom Reed II, James Renacci; Peter Roskam; Paul Ryan; Aaron Schock; Allyson Schwartz; Adrian Smith; Linda Sánchez; Mike Thompson; and the Bill’s sponsor, Todd Young.
Although introduced before H.R. 2575, S. 1188 to date has drawn less interest among members of the Senate. The Senate referred S. 1188 to the Senate Finance Committee, where to date, that Committee has not taken any further action. It presently has 8 cosponsors, 7 of which are Republicans. See S. 1181 Cosponsors. With Democrats the Majority Party in the Senate, many expect the bill to require significant public pressure and support for the Committee to report the bill out from the Committee, which presently is Chaired by Democrat Max Baucus. Other Senate Finance Committee members include Orrin Hatch; Michael Bennet; Sherrod Brown; Robert “Bob” Casey Jr.; John “Jay” Rockefeller IV; Debbie Stabenow; Ron Wyden; Richard Burr; Maria Cantwell; Benjamin Cardin; John Cornyn; Michael Crapo; Michael Enzi; Charles “Chuck” Grassley; John “Johnny” Isakson; Robert “Bob” Menéndez; Bill Nelson; Robert “Rob” Portman; Pat Roberts; Charles Schumer; John Thune; and Patrick “Pat” Toomey.
This past weekend, S. 1188’s sponsor, Maine Senator Susan Collins sought to beef up support for the bill. In urging support for her bill, Senator Collins said the health care law’s 30-hour per week definition kills jobs. “Obamacare is actually discouraging small businesses from creating jobs and hiring new employees,” she said. “The law also has perverse incentives for employers to reduce the number of hours that their employees can work.”
How To Contact Key Committees To Show Support or Share Other Feedback
Individuals wishing to share their support or other input about S. 1181 with the Senate Finance Committee can call (202) 224-4515 or send their written input to the Senate Committee on Finance members via fax to (202) 228-0554.
Support or other input on H.R. 2575 should be sent via fax to House Ways & Means Committee members via fax to (202) 225-2610 or by calling the Committee office at (202) 225-3625.
Committee members and other members of Congress also generally can be contacted via e-mail through the link provided on each member’s webpage. Because security precautions generally delay delivery of mail to members of Congress for 7-10 days, concerned individuals generally are encouraged to contact the Committee or other members of Congress via fax or e-mail.
Stay In Touch & Join The Discussion On Health Care Reform
Want to stay in touch with the latest developments on health care reform and get involved with helping to share meaningful improvements in U.S. health care and workforce policy and our health care and health care insurance system? The Coalition For Responsible Health Care Policy provides a resource that concerned Americans can use to share, monitor and discuss the Health Care Reform law and other health care, insurance and related laws, regulations, policies and practices and options for promoting access to quality, affordable healthcare through the design, administration and enforcement of these regulations. We also encourage you to participate in our Project COPE: Coalition for Patient Empowerment initiative here to share ideas, discuss issues, and access and share tools and other resources.
For Help or More Information
If you need help monitoring or providing input on this legislation or to understand and respond to these or other legislation, laws and regulations, or with reviewing and updating, administering or defending your group health or other employee benefit, human resources, insurance, health care matters or related documents or practices, please contact the author of this update, Cynthia Marcotte Stamer.
A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 25 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters including extensive experience on HIPAA and other privacy and data security issues.
A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals. A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials about regulatory, investigatory or enforcement concerns.
Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations. She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications. You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and register to receive future updates about developments on these and other concerns from Ms. Stamer here.
If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:
- IRS Releases Updated Healthcare Law Online Resources Publication
- IRS Extends Remedial Amendment On Cycle Opinion Deadline For Some Defined Benefit Plans
- Self-Dealing Or Other Mishandling of Employee Benefit Plan Funds Risky For Fiduciaries & Those Appointing Them
- Employers & Insurers Reminded Of July 31 Deadline To Pay New ACA-Required PCORI Fees
- Use New Government Health Care Reform Resources With Care
- OCR Warns Others Learn From WellPoint’s $1.7 M HIPAA Settlement
- “Pay Or Play” Reprieve Still Leaves Employers Facing Challenging 2014 Health Care Reform Deadlines
- HHS Continues Preparations For New Health Insurance Marketplace By Awarding Grants To Promote Kids Enrollment
- HHS Touts Enrollment Tools, Says Exchange Enrollment Ready Despite GAO Concerns
- HIPAA Sanctions Triggered From Covered Entity Statements To Media, Workforce
- Consider OCR Technical Corrections When Updating Privacy Practices & Agreements For Omnibus Restatement of HIPAA Privacy, Security, Breach Notification & Enforcement Rules
- Id & Manage Hidden Employee Benefit Exposures In Business Insolvency Or Other Transactions
- Final Regulations Update HIPAA Health Plan Wellness Program Rules
- Beware: Not All Products Marketed As “Fixed Indemnity Coverage” Products Are HIPAA/ACA Exempt
- CMS Publishes FY 2014 Final Inpatient Rehabilitation Facility Prospective Payment Rule
- Tighten Disability Compliance To Avoid ADA Suits, Program Disqualification & Other Risks
- Doc Caught Submitting Conflicting Patient Records to Private Payer Versus Medicare Criminally Sentence, Pays Civil Settlement
- OCR To Covered Entities: Learn From WellPoint $1.7 Settlement
- Improper Billing Of Private Payers Increasing Source Of Liability & Risk For Providers
- Ambulatory Care Orgs Face New Joint Commission Standards Beginning January 1, 2014
- Hollywood Pavillion & Other Fraud Convictions Show Individuals Risk Prison Time For Health Care Fraud Involvement
- 55 Hospitals To Pay $35M+ To Settle FCA Claims Charges On Kyphoplasty Procedures
- Whistleblower Collects $2.7 M of $14.5M Sound Inpatient Physicians Overbilling Settlement
- OIG Urges CMS To Step Up Efforts To Recover “Overpayments”
- HHS Continues Preparations For Health Care Marketplace By Awarding $32M Of Grants To Up CHIP & Medicaid Enrollment
- Hospital Pay $275K To Settle HIPAA Charges After Sharing PHI With Press, Workforce In Response To Fraud Reports
- OCR Makes Technical Corrections To HIPAA Omnibus Final Rule; September 2013 Enforcement Deadline Looming
- Updated Kaiser Family Foundation Tool May Help Project Which Employees Will Get Exchange Subsidies
- New IRS Guidance On ESOP Investment Diversification Reminder To Tighten Compliance, Risk Management
- EBSA Releases Model ACA Notices Discussing Coverage Options
- Group Health Plans &No-Fault & Worker’s Comp Ruled Primary Plans When Coordinating With Medicare Advantage Plans
- Changing Plan Years Won’t Extend Health Plan’s Affordable Care Act Annual Limit Waiver Eligibility
- Deadline To Send ACA Summary of Benefits & Coverage Adds Pressure To Finalize 2014 Plan Designs As Agencies Add MEC & MV Disclosures To SBC
- Study Finds Down Economy, Not Health Care Reform Accounts For Slower Health Care Cost Increases; Projects Renewed Costs When Economy Improves
- IRS Witholding Calculator Can Help Avoid Over & Underwithholding
- Responding To West, Texas, Boston & Other Tragedies: Information and Reassurance Resources
- Justice Department Charges Employer, Pension Plan With Violating USERRA Reemployment Rights
- Administration Proposes To Let PBGC Board Set Premiums In Effort To Shore Up Finances
- Administration Proposes Expanding Eligibility, Simplifying Small Employer Health Care Tax Credit
- Health Care Transparency Effectiveness & Value Depends On Data Quality, Understanding & Awareness
- Test Your Health Care Reform Knowledge On 3rd Anniversary of Reform Passage
- Insured “Expatriate Plans” Get Temporary Reprieve From Affordable Care Act Compliance Thru 2015 If Meet Other Health Plan Mandates
- Insured “Expatriate Plans” Get Temporary Reprieve From Affordable Care Act Compliance Thru 2015 If Meet Other Health Plan Mandates
- OCR Plans To Survey Health Plans, Other Covered Entities Hit With HIPAA Audits in 2012
- Businesses Urged To Strengthen Their Worker Classification Defenses As IRS, Other Agencies Step Up Audits & Enforcement
- Alert Employees Claiming Qualified Adoption Expenses and Education Credits About Changed IRS Procedures
- 13 Employer Tips For Coping With Health Care Reform Now!
- Sequester Will Cut ACA Small Businesses Health Care Tax Credits
For important information about this communication click here. THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS. ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.
©2013 Cynthia Marcotte Stamer, P.C. Nonexclusive license to republish granted to Solutions Law Press, Inc. All other rights reserved