WASHINGTON — Sen. Susan Collins is pushing a bill that would raise the Affordable Care Act definition of a full-time work week from 30 hours to 40 hours. This would align the definition with other federal rules on the length of a work week.
Under the Affordable Care Act, companies with 50 or more workers would have to provide health insurance coverage to their full-time employees or risk a series of escalating tax penalties. Full-time is defined as 30 hours per week in the act. Under the Fair Labor Standards Act, a regular, full-time work week is 40 hours.
The 40 Hours is Full-time Act is sponsored by Collins, a Republican, and Sen. Joe Donnelly, D-Indiana.
“The new healthcare law creates a perverse incentive for businesses to cut their employees’ hours so they are no longer considered ‘full time.’ If its definition of a full-time worker as someone who works only 30 hours a week is allowed to go into effect, millions of American workers could find their hours, and their earnings, reduced,” Collins said in a press release last month. “This simply doesn’t make sense.”
On Tuesday, the Obama administration delayed implementation of that mandate by a year to 2015. The delay gives Donnelly and Collins more time to secure support for their bill.
Some businesses have considered reducing workers’ hours to below 30 hours per week to skirt the insurance requirement, which many say they can’t afford.
Cutting the workers’ hours would be harmful to many households and the economy, Donnelly said.
A recent study found that the more hours an employee works, the more likely it is that the employer already provides insurance, and therefore the more likely the employer is not subject to the penalty to begin with. The University of California at Berkeley study found that nearly 80 percent of employees working 37 hours or more per week receive employer-based insurance, while less than half of those working between 30 and 36 hours receive employer-based coverage.
Donnelly noted there is a companion bill in the House and he sees bipartisan support for the change in definition, which he views as “common sense.”
Donnelly also addressed the one-year delay in requiring employers to provide insurance coverage to full-time workers.
“I think that’s a real positive step,” good for businesses, workers and the country overall, Donnelly said.
It enables businesses “to catch their breath” so they are able to “make decisions in a thoughtful, reasonable way as opposed to being rushed,” he said.
It also gives Congress time to make changes to the act.
Sue Loughlin of The Tribune-Star contributed to this report.