Proposed Legislation Targets ACA Requirements for the Full-Time Employee
Since the passing of the Affordable Care Act, there has been much discussion about the definition of full-time vs. part-time as it pertains to hours an employee works and when an employee becomes designated as ‘full-time.’ The current interpretation of these ACA requirements has caused many problems for both employers and employees.
Issues exist because under the current ACA requirements, a company must provide health insurance to an employee who works 30 hours or more per week—which was the original definition of a “full-time workweek.”
This controversial ACA requirement may be on the chopping block, however, after the U.S. House of Representatives as recently as last week passed the Save American Workers Act of 2015, a law that would alter the definition of a full-time employee under the Affordable Care Act. The bill passed the House 252-172, and is expected to reach the Senate later this month.
The law, known as H.R. 30, will effectively increase the hours used to calculate ACA benefits from 30-hours per week per month to 40 hours. The change was needed, according to groups like the Society for Human Resource Management, because employers are experiencing challenges and unintended consequences as a result of the new ACA requirements.
“Specifically defining ‘full-time’ as an employee working 30 hours a week is inconsistent with standard employment practices and benefits coverage requirements in the U.S. and conflicts with other federal laws,” SHRM says.
It is the opinion of many that changing the work week to 40 hours will help employment, increase opportunities for people working part-time, and help the economy and smaller employers who have been burdened by the reduced work week. Many believe the effort will in effect “gut” the employer mandate because employers would only be required to provide health benefits for workers who work 40 hours or more per week. This means employers would be able to give full-time workers 39 hours of work—which is nearly a full work week—and thereby avoid providing health insurance to the employee, which is an ACA requirement.
This legislation may not make it very far, however.
President Barack Obama has already threatened to veto the legislation and House Democrats have previously expressed disappointment with Republican-led effort to alter the full-time employment definition.
Stay tuned for more updates about this important piece of legislation and others involving ACA requirements and how they could shake small business health insurance and small business employee benefit solutions. While we wait for more to unfold, we also encourage you to contact us with any questions about how this could affect your employee benefits.
Also, be sure to stay up to date on all of the important dates your small business should know as 2015 kicks into high gear.