House Republican leaders plan to start dismantling the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148) by reintroducing a bill, the Save American Workers Bill of 2015, which would alter the calculation of the number of full-time equivalent employees for the purposes of determining which employers are subject to penalties. In addition, the legislation would change the definition of “full-time employee” used in calculating those penalties.
Specifically, the bill would raise the threshold that defines full-time employment from 30 hours per week under current law to 40 hours per week. The bill first appeared in 2013 as HR 2575 and was introduced by Rep. Todd Young, R-Ind. “Repealing this redefinition [of “full time employment”] and restoring it to the historical norm ensures this bill not only protects working poor and middle-class employees, it also ensures that laws governing employment are consistent,” said Todd at the time of the bill’s introduction.
The changes to the employer responsibility requirements of the PPACA would reduce the number of employers assessed penalties and lower the penalties assessed against employers that do not offer insurance (or offer insurance that does not meet certain criteria) and that have at least one full-time employee receiving a subsidy through a health insurance exchange. As a result, the largest budgetary effect of the measure would be to reduce the amount of penalties collected from employers.
The Congressional Budget office (CBO) and the staff of the Joint Committee on Taxation (JCT) estimated that the measure would change the sources of health insurance coverage for some people. Specifically, in most years over the 2015-2024 period, the CBO and JCT estimate that the legislation would reduce the number of people receiving employment-based coverage—by about 1-million people; increase the number of people obtaining coverage through Medicaid, the Children’s Health Insurance Program (CHIP) or health insurance exchanges—by between 500,000 and 1-million people; and increase the number of uninsured—by less than 500,000 people.
As a consequence of the changes in penalties and in people’s sources of insurance coverage, the CBO and JCT estimate that the bill would increase budget deficits by $25.4 billion over the 2015-2019 period and by $73.7 billion over the 2015-2024 period.