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Definition Of ‘Full Time’ Becomes A Sticking Point In Obamacare

By Julie Rovner, NPR News

July 31st, 2013, 5:45 AM

This story comes from our partner ‘s Shots blog.

Of all the contentious claims about the Affordable Care Act, few have been more contentious than over the impact it’s having on employers.

Restaurant employees have been a focus of debate on Obamacare coverage (Photo by Spencer Platt/Getty Images).

It’s hard to pick up a newspaper or turn on a television without seeing a story about some boss cutting workers’ hours or saying they won’t be doing any more hiring because of the health law.

But is the law really having an impact on the economy?

Not surprisingly, it depends whom you ask.

Opponents of the law point to anecdotes in industries with a lot of low-wage workers, like restaurants.

They also point to employer surveys like one from the International Foundation of Employee Benefit Plans. It found that nearly one in five small businesses said they were reducing hiring to try to stay under the 50-worker threshold that exempts companies from a requirement in the Affordable Care Act that full-time employees be offered health insurance. Another 16 percent said they planned to adjust hours so fewer workers would be eligible for health insurance.

But now the law’s supporters, including the White House, are fighting back.

They’re putting out their own data showing that part-time employment is no higher during this economic recovery than during other recent economic recoveries.

That includes people working part time who’d rather be working full time. That data shows that most of the people involuntarily working part time are in that situation due to state and federal budget cuts, not the health law. They’ve also pointed out that weekly hours have risen since the health law was passed, including in the restaurant industry.

So who’s right?

It’s entirely likely that both sides are. One of the White House talking points is that only about one percent of the workforce would be impacted by the Affordable Care Act requirements. Those are typically people who don’t have health coverage and who work more than 30 hours a week for companies with more than 50 employees.

That’s not a big enough group, they point out, to really affect the economy on a macroeconomic level. And it’s not.

But one percent of the workforce is more than a million people, more than enough to make for a lot of anecdotes. There’s also the issue that the administration and its allies are looking back at what’s happened so far, while opponents are looking mostly forward at what may happen in the future.

Still, there are efforts on Capitol Hill to address one point of contention: The law defines full-time work as more than 30 hours per week, rather than the traditional 40.

Sens. Susan Collins R-Maine, and Joe Donnelly, D-Ind., have introduced the “Forty Hours is Full Time Act of 2013,” which they say would “ensure that the definition of full-time employee and full-time equivalent in the ACA is consistent with the traditional full-time 40-hour work week.” A similar bill has been introduced in the House.

The prospects for the legislation, however, are not good.

One reason is that Congress is so gridlocked and Republicans are so dug in against the law that even when there is a consensus that something needs to be fixed there is little likelihood of it happening.

And on this issue there’s no consensus that changing the definition of a full-time work week would actually change employers’ incentives.

University of Chicago economist Casey Mulligan, writing in the New York Times, suggested that such a change could create its own set of disincentives, with a 39-hour-a-week job with no insurance potentially paying more than a 40-hour-a-week job with employer insurance, because of subsidies available for health insurance in the new health exchanges.

6 Responses to “Definition Of ‘Full Time’ Becomes A Sticking Point In Obamacare”

  1. Ray says:

    Unpaid lunch breaks are pretty standard, and unless companies adopt a 9-hour day with 8 hours of actual work, very few people will hit that 40-hour mark. 9-5 5 days a week, minus an hour a day for lunch, is only 35 hours.

    I don’t know about you, but I consider that a “full time job”.

    If the limit was raised to 40, I imagine every company running standard “full time” 8 hour days would just rate up the hourly wage (or leave salary alone) and count lunch breaks as non-work time, as they are allowed to. Employees get paid the same, and suddenly almost no companies have full time employees.

  2. Brian says:

    How many discrimination lawsuits will be filed on the behalf of those who feel they were unfairly demoted to part time based on the health reform bill? When 2014 hits and they see the subsidy, what is there to lose for the employee who wants to gain their ‘fair share’ of lawsuit money.

  3. Lena Conway, Group Health Insurance Underwriter says:

    I am a group underwriter for a union organization in the last 16 years. Being trained to be an underwriter right after college by big insurance carriers, working for a Taft Hartley Fund is very eye-opening. They make their own standard of what’s a full-time, part-time and when eligibility for health benefits is earned an who will earn it. Many even go by work hours based on various period limits. Talk about administrative nightmares. Selection of risk is rampant, though there’s always a kind of rationale to it but there’s never truly a way to monitor and enforce the rules because they only do audits every so many years. It’s fun – or rather challenging to underwrite a plan like this. So many non-standard rules to take into account. So many working class people are already subjected to full- time or part-time status change as their employers and their union negotiated. When 9/11 happened, may FT people were dropped out of eligibility after having their work hours cut. So the employers retained a lot more part time people to do the work, but less people to pay for their health benefits. The ACA in 2014 will definitely cause more non-union employers to do the same thing. When the economy is bad, or when a company wanted to make more profit, the workers’ status always get redefined to suit the employers’ goals. Employers have always behaved liked this in some degree or another. So to blame ACA for causing FT workers losing income by having their hours cut is ludicrous. Employers will act the same way under other economic circumstances.

  4. Lacy says:

    Employers concerned about demoting workers just so they can escape treating them fairly by offering health benefits are shyster employers. Fair and honorable employers would never sink that low. It is disgusting that any employer chooses not to offer fair wages and decent health benefits. Must be Republicans, huh? Simply outrageous! The sooner we have single-payer healthcare for all, the better!

  5. Edward says:

    Whatever the number is, the number of employees finding their hours cut seems to be increasing. And can you really blame them? When their competitors are doing the same thing (one reason is to save on healthcare), business owners (especially small and medium sized) simply have no choice.

    Of course, I work about 70 hours per week but I pay myself!

  6. Randy says:

    I agree with Edward. It’s a race to the bottom. Less hours, low wages, no health benefits, no vacations, no paid holidays, no pension, no 401k, complain and you get fired, a Republican nirvana, if you ask me.