Bills
| 3.23.22

Delaying Obamacare’s Employer Mandate & Restoring the Full-Time Work Threshold to 40 Hours (H.R. 3798)

Do you support or oppose this bill?

What is H.R. 3798?

(Updated May 21, 2019)

This bill — the Save American Workers Act of 2018 — would repeal the 30-hour threshold for classification as a full-time employee for purposes of the employer mandate in the Patient Protection and Affordable Care Act (ACA, commonly known as Obamacare). It’d then replace the 30-hour threshold with a 40-hour threshold for classification as a full-time employee. It contains the legislative text of four related bills — including legislation to delay Obamacare’s employer mandate and the so-called “Cadillac tax” on high-cost employer-sponsored health plans, and repeal the tanning tax — summaries of which can be found below.

Save American Workers Act of 2017

This section of the bill would change the definition of “full-time employee” for purposes of the employer mandate to provide minimum essential health coverage under the ACA. It would raise the average number of hours a “full-time employee” must work to meet that threshold from an average of 30 hours a week to an average of 40 hours a week.

Employer Relief Act of 2018

This section of the bill would suspend the employer mandate to provide health insurance coverage until January 1, 2019. It would also amend the ACA to delay the implementation of the excise tax on high cost employer-sponsored health coverage (commonly referred to as the “Cadillac tax”) until after December 31, 2020.

Tanning Tax Repeal Act of 2017

This section of the bill would amend the Internal Revenue Code to repeal the 10% excise tax on indoor tanning services.

H.R. 6718

This section of the bill would amend the Internal Revenue Code of 1986 to provide that health insurance coverage statements are required to be provided to individuals only upon request.

Argument in favor

This bill would counteract the negative impacts of Obamacare on workers who have been forced into part-time work because employers want to avoid the employer mandate, and delay the “Cadillac tax” on high cost employer-sponsored coverage. It’d also help small businesses and get rid of the onerous tanning tax.

Argument opposed

The ACA’s requirement that employers offer healthcare benefits to employees working 30 or more hours per week has helped expand coverage to many Americans — repealing the requirement now would leave many families without coverage while the tanning tax has kept people out of tanning beds.

Impact

Employees working 30-40 hours; workers with employer-provided health plans; employers who offer health plans; indoor tanning salons; the Internal Revenue Code; and the Affordable Care Act.

Cost of H.R. 3798

A CBO cost estimate for this bill is unavailable, but estimates for individual bills are available. A 2015 version of the Save American Workers act was estimated to increase budget deficits by $18.1 billion over its initial five-year period (2015-2020, and $53.2 billion over its initial ten-year period (2015-2025). The Employer Relief Act of 2018 is estimated to increase federal deficits by $39.5 billion over the 2019-2028 period. In its cost estimate for the American Health Care Act of 2017, which included a provision to repeal the tan tax, the CBO estimated that repealing the tan tax would reduce federal tax revenue by $600 million over the period 2017-2026.

Additional Info

In-Depth: Rep. Jackie Walorski (R-IN) introduced the Save American Workers Act with the support of 77 cosponsors (including 72 Republicans and five Democrats) to provide relief to middle-class families by restoring the traditional 40-hour work week under the ACA:

“Obamacare’s burdensome employer mandate and its redefinition of full-time workers are hurting middle class American families and crushing our job creators. The Save American Workers Act will provide much-needed relief to hardworking [workers] who have faced reduced hours and fewer jobs. This bipartisan, commonsense bill will give businesses the certainty they need to create jobs, and it will give workers the opportunities they need to succeed.”

Rep. Dan Lipinski (D-IL), a cosponsor of the Save American Workers Act, adds that in its current form, the ACA puts American workers at risk:

“Most Americans will tell you that a full-time workweek is 40 hours, but the ACA defines full-time as 30 hours. In its current form, the ACA puts the take-home-pay and scheduling flexibility for millions of hard-working Americans at risk.  With reduced hours or the inability to exchange shifts with coworkers, families would be forced to live with less or find another part-time job to try to make up the difference. Changing the law to keep middle-class families from having to make this painful choice is just common sense, and hopefully this bill can be a step towards making the ACA work better for all Americans.”

The National Retail Federation (NRF) and International Franchise Association (IFA) both support defining full-time workers as employees that work 40-hour, rather than 30-hour work weeks. David French, NRF’s Senior Vice President for Government Relations, contends that restoring the traditional 40-hours work week benefits both employers and employees:

“Restoring the traditional 40-hour workweek would benefit employers and employees. It would return power to employers to establish and maintain health care benefit eligibility standards, protect full-time employees and benefit hourly employees with more hours, more income and greater opportunity to advance to full-time employment… The Save American Workers Act is a commonsense piece of legislation that will restore an established workforce precedent and protect business owners and their employees. The Affordable Care Act is in serious need of revision and reform, and we urge Congress to further that process by approving this bipartisan piece of legislation to restore the traditional definition of a 40-hour workweek.”

The Center on Budget and Policy Priorities (CBPP) opposes raising the threshold for full-time work under the ACA from 30 to 40 hours per week. The CBPP cites Ken Jacobs, chair of the University of California’s Center for Labor Research, who argues that a 40-hour work week threshold will make a shift toward part-time employment much more likely for many workers, and New York University’s Sherry Glied and Claudia Solis-Roman, who add that raising the full-time employee threshold to 40 hours will likely subject a larger proportion of workers to having their hours cut and increase the federal costs of healthcare.

The Employer Relief Act of 2018 passed the House Ways and Means Committee on a 22-15 vote along party lines with the support of four cosponsors, all of whom are Republicans. Rep. Mike Kelly (R-PA), an original cosponsor of the bill, argued that the bill gives relief to American workers and employers struggling under the ACA:

“[This bill] delays the Cadillac Tax for one additional year, until 2023. We have discussed the Cadillac Tax at length in this committee and how it is a misguided policy in Obamacare. In fact, this is an issue that unites both Republicans and Democrats… This tax continues to hang over the head of the 175 million Americans who receive health insurance through their employer. I am also pleased that we are giving relief to employers crushed under the employer mandate. Another misguided policy in Obamacare that the Obama administration never enforced, the employer mandate costs small businesses with just over 50 employees millions of dollars in unnecessary administrative compliance and reporting."

Business groups, such as the Chamber of Commerce, have advocated for a complete repeal of both the Cadillac tax and employer mandate. James Klein, President of the American Benefits Council, an employers group, calls these provisions a “strain [on] employer resources” that “impose[s] greater out-of-pocket costs on working families.”

Democrats, who uniformly voted against the Relief for Employers Act of 2018 in the Ways and Means Committee markup, have criticized its impact on the deficit and accused Republicans of political posturing.

The Tanning Tax Repeal Act of 2017 has the bipartisan support of 78 cosponsors, including 76 Republicans and two Democrats. Rep. George Holding (R-NC) introduced it to allow tanning businesses to flourish, saying at a markup of the bill that:

“The sooner that we can lift this tax, eliminate this tax and allow these small business to get on with the business of living the American dream, growing their business, being profitable, paying taxes, employing people, the better off that we will be.”

Elizabeth Ryan, Legal Fellow at the Northeastern University School of Law Center for Health Policy and Law and head of Public Health Law Watch, calls the tanning tax a “public health success story” and argues that lower-than-expected revenue from the tax may indicate that it’s achieving a more important public health goal:

“When the [tanning] tax was enacted in 2010, the non-partisan Congressional Joint Committee on Taxation estimated that it would bring in $2.7 billion in revenue over 10 years, and would offset some of the costs of the ACA overall. After four years, however, the tax had only brought in about $367 million, far less than the approximate $1 billion originally projected by that time. Some detractors then declared the tax a “failure” and blamed it for the loss of tens of thousands of jobs. Yet these arguments discount the notion that the revenue was perhaps a secondary goal of the tax, behind its ability to deter people from engaging in the dangerous pursuit of indoor tanning… [T]he Centers for Disease Control and Prevention reported that the number of high school students who reported having artificially tanned has decreased by more than half since the enactment of the ACA, from 15.6% in 2009 to 7.3% in 2015. While this may signify a downturn from a business perspective, deterring younger clients from beginning or continuing indoor tanning is a particularly desirable public health goal, as ‘young women under the age of 25 who engage in indoor tanning have been shown to be over 60 percent more likely to develop skin cancers such as basal or squamous cell carcinoma compared to those who have never engaged in the behavior’… Before Congress acts [to repeal the Tan Tax], it should recall that although the revenues raised by the tax may be relatively small, its true goal should be to reduce indoor tanning, especially among young people. Although far more research is needed to establish causation, the apparent reduction in rates of tanning that has occurred since the tax’s enactment suggests that the tax may well be doing its job.”

H.R. 6718 has been referred to the House Ways and Means Committee. Rep. Mike Kelly (R-PA) introduced this bill with the support of two cosponsors, including bipartisan support from Rep. Mike Thompson (D-CA).


Media:

Summary by Lorelei Yang

(Photo Credit: iStockphoto.com / fstop123)