House Small Business Subcommittee on Health & Technology Holds Hearing on the ACA Provision Defining 30 Hours as “Full Time”
NAHC Submits Testimony Addressing Consequences for Home Care & Hospice and Urges Support for Legislation Defining Full Time as 40 Hours
October 16, 2013 08:45 AM
The House Small Business Committee Subcommittee on Health & Technology recently held a hearing entitled, “The Effects of the Health Law’ Definition of Full-Time Employee on Small Businesses.” The subject of the hearing was a provision in the Affordable Care Act (ACA) that would define a “full time” employee as a person who works 30 hours a week rather than 40 hours a week, which is the standard definition of a “full time worker” in most cases.
Currently the provision in the ACA that imposes penalties on employers with more than 50 full-time equivalent employees for not providing health insurance for their “full time” workers defines an employee working just 30 hours a week as full time. This definition of full time is entirely out-of-keeping with standard employment practices across the country.
Raymond J. Keating, Chief Economist, Small Business & Entrepreneurship Council; Steven Hermann, Vice President, Paul's Supermarket, Inc.; Stephen Bienko, President, Owner, Bienko Enterprises and Dean Baker, Co-Director, Center for Economic and Policy Research served as the hearing’s four witnesses and represented both industries that would be affected by the 30 hour provision as well as policy experts who shared differing opinions on what the true effect of the 30 hour rule would mean.
In its testimony submitted for the record, the National Association for Home Care & Hospice (NAHC) stated that:
“The majority of personal care home care workers do not receive employee health insurance because home care agencies have three problems that are fairly unique: reliance on government programs such as Medicaid where payment rates as low as $11 an hour won’t cover the increased costs of providing health insurance; consumers of private pay home care that are often elderly and disabled with fixed low incomes; and a home care workforce with widely varying work hours primarily to accommodate the needs of their infirm clientele.
Home care agencies that are unable to provide health insurance or absorb the ACA penalties will have to restrict their employees to no more than 29 hours per week to ensure their workers are considered part-time under the ACA. A survey that NAHC conducted earlier this year showed two-thirds of the private pay home care companies and three-quarters of the Medicaid home care companies are expecting to reduce working hours of staff to avoid the penalties. Millions of home care workers could find their hours, and thus their earnings, are cut back at a time when many of them are already struggling.”
NAHC’s testimony included comments from Patricia M. Krall-Dwyer, CEO of Health Force in Cheektowaga, NY. Ms. Krall-Dwyer’s statement reiterates the consequences this rule will have on the home care & hospice community, explaining that:
“Due to the continuing cuts to our reimbursement rates our agency has to remain very lean administratively to continue to operate in this current environment. Increasing the hourly requirement to 40 hours to be considered a full time employee will accomplish a number of benefits and allow for the spirit of the Affordable Care Act to be implemented. By using a 40 hour work week to define full time, our organization would be able to comply with the mandate without having to add an additional FTE to enforce compliance and would incent our team members to increase their hours to access affordable coverage instead of reducing hours to avoid it.
Implementing this change could reduce our costs by nearly 40%. We do not have other departments to help us absorb the costs of tracking, monitoring, yet another individual mandate. We track our employees for 40 hours for overtime. We track our employees for 40 hours for vacation. This mandate of 30 hours will mean a massive IT overhaul and redevelopment of compliance processes. Most small agencies do not have an IT department; it's us on the Internet trying to figure out how to adjust our computers.
It truly is small businesses that run this country. During the last economic period, it was small businesses that added jobs. It was small business that increased economic growth. I ask that Congress please not add us to the endangered species list.”
The same issues that affect the home care & hospice community are affecting many other small business groups across the country – several of whom were represented during the hearing. Steven Hermann, representing the National Grocers Association (NGA), testified that:
“Employers are likely to hire fewer employees, especially full-time employees, learning to do more with fewer workers in order to control costs. Not only is the law redefining what it means to be a full-time worker in this country, but it’s permanently changing the American workforce by interfering with part-time workers’ ability to earn a living. Part-time employees in need of additional money may no longer be able to pick up an additional shift to pay for unexpected expenditures or earn extra money around the holidays.”
Similar to both NAHC’s concerns and those of the NGA, Stephen Bienko, a member of the International Franchise Association, told the Subcommittee that by,
“Defining full-time as 30 hours, will cause many employers - like me – to simply alter their employees’ hours in order to run a successful small business. This puts all of us at a loss; employers must implement new workforce management methods, and some team members will receive fewer hours and reduced take-home pay, not to mention they will still be ineligible for employer-sponsored health coverage.”
In order to prevent the 30 hour provision from going into effect and the consequences it would have on small businesses of every type in every sector of the economy, Senator Susan Collins (R-ME) introduced S. 1188, the Forty Hours is Full-Time Act, earlier this year.
The bill aims to modify the provisions in the Affordable Care Act (ACA) that define a “full-time employee” as someone who works thirty hours a week. S.1188 would allow employees to work more than 30 hours a week without triggering penalties under the ACA on the businesses that hire them.
For more on Senator Collins’ introduction of S. 1188, please see NAHC Report, from July 23, 2013.
S. 1188 currently has ten cosponsors and two companion pieces of legislation in the House of Representatives that aim to achieve the same result: H.R. 2575 was introduced by Congressman Todd Young (R-IN) and currently has 155 cosponsors. H.R. 2988 was introduced by Congressman Dan Lipinski (D-IL) and currently has eight cosponsors.
Home care agencies that are unable to provide health insurance or absorb the ACA penalties will have to restrict their employees to no more than 29 hours per week to ensure their workers are considered part-time under the ACA. Millions of home care workers could find their hours, and thus their earnings, are cut back at a time when many of them are already struggling.
NAHC members are encouraged to contact their members of Congress and ask them to support legislation to amend the ACA to change the definition of full time to forty hours. To send a message through the NAHC Legislative Action Network, click here.
For more information on the hearing, please click here.
To read NAHC’s testimony, please click here.