Why Does the ACA Definition of Full-Time Work Matter?
January 9, 2015
Congressional Republicans are looking at changing the Affordable Care Act's definition of full-time work. What exactly would that mean?
Currently, the ACA's employer mandate requires employers who have at least 50 full-time employees to provide their employees with health insurance -- those who do not are forced to pay a fine. Under the ACA, full-time work means working 30 hours per week or more. To avoid the additional labor costs, employers have a few options. For example, they can keep their workforce under 50 employees, cut employees' pay, cut current employees' hours to less than 30 hours a week or hire more part-time employees (for less than 30 hours per week). Employers have responded to the law with workforce changes -- according to Ben Gitis, policy analyst at the American Action Forum, the ACA had reduced employment by 350,544 jobs as of September 2014.
What would changing the definition of "full-time" do for workers? Gitis contends it would reduce the likelihood that workers currently working below the 40-hour mark but above 30 hours would see their hours cut or jobs lost, because employers would no longer be penalized by offering employment for more than 30 hours a week. In 2013, there were 11.6 million workers in the 30 to 40-hour range. If the 30-hour rule remains in place, these workers could see their work hours dropped to 29 hours or less.
Source: Ben Gitis, "Changing the ACA's Definition of Full-Time Work," American Action Forum, January 8, 2015.
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