Two U.S. senators have introduced a bill to redefine what it means to be a full-time employee under the Patient Protection and Affordable Act.
The measure, if enacted, would protect a greater number of employers from fiscal penalties imposed by the law as now written.
The legislation, the Forty Hours is Full Time Act of 2013, was introduced by Sens. Joe Donnelly, D-Ind., and Susan Collins, R-Maine, and would change the PPACA’s definition of full-time employees to those working an average of 40 hours per week, or 174 hours per month.
As outlined in the PPACA, employers are required effective in 2014 to offer qualified coverage to full-time employees — defined as those working an average of 30 hours per week — or be liable for a $2,000 penalty per employee.
“Most Hoosiers I know think 40 hours is full time. We need to change the definition of a ‘full-time employee’ in the Affordable Care Act to bring it in line with what most Americans have traditionally recognized as full time,” Donnelly said in a statement introducing Senate Bill 1188. “We also need to provide clarity to employers so they have the information they need to run their businesses and plan for the future.
“Many employers have to make decisions because of this definition, and some have chosen to cut current part-time employees’ hours.”
Donnelly and Collins said they worry, though, that full-time as now defined will end up hurting workers because they’ll end up earning less.
“The new health care law creates a perverse incentive for businesses to cut their employees’ hours so they are no longer considered ‘full time,’” Collins said. “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. This simply doesn’t make sense.”
Sens. Collins and Donnelly urged President Obama to provide transition relief for employers. They co-authored a letter to the president urging the administration to work with the employer community to provide transition flexibility beyond Jan. 1, free from the threat of penalty.