In spite of its one-year suspension of the employer mandate under health care reform, the government added implementation and compliance materials for employers to government websites. Meanwhile Republican legislators attacked not only reform’s revenue and penalty collection functions, but also its definition of full-time employees as 30 hours per week, saying it must become 40 hours a week, to bring reform’s definition in line with most businesses’.
Republican House Bill Would Get IRS out of Health Reform
The U.S. House of Representatives passed H.R. 2009, the “Keep the IRS Off Your Health Care Act,” on Aug. 2 by a vote of 232 to 185. The measure would stop IRS enforcement of revenue-raising health reform provisions, including taxes from individuals and large employers that fail to make required health insurance purchases.
In a related development one month ago, the Obama administration delayed reform’s employer play-or-pay mandate for one year, until January 2015. The individual mandate remains in effect.
Reports stated that it is the 40th bill aimed at repealing or gutting the Affordable Care Act. It is extremely unlikely that the Democratic-controlled Senate would take up such a bill. President Obama on July 31 said he would veto it.
Lauding its passage, bill sponsor Rep. Tom Price, R-Ga., said “[t]he Keep the IRS Off Your Health Care Act [embodies a] commitment to preventing any of our fellow citizens from having to answer to the IRS when it comes to their personal health care decisions.”
Price tied the bill in with the recent scandal involving enhanced IRS scrutiny of nonprofit political groups based on their right-wing affiliation: “The IRS clearly has not been able to prudently and impartially enforce current tax laws. It has abused its authority by targeting individuals and organizations. There’s no reason to trust this massive agency with … our health care.”
Legislator Moves to Change Reform 30-hour Definition in Line with Federal 40-hour Week
Sen. Susan Collins, R-Maine, warned that the reform law will depress workers’ earnings and inhibit job growth in the weekly Republican address on Aug. 3. Federal health care reform: (1) creates a perverse incentive for businesses to reduce the number of hours that their employees can work; and (2) has a chilling effect on hiring, Collins said.
Collins said the reform law incentivizes companies to reduce worker hours, so as to ensure that more workers remain part-time, because employers defined as “large” under the law are threatened with the burden of offering all full-time workers health insurance or paying heavy fees for not doing so.
“A school system in my state of Maine is already preparing to track and cap the numbers of hours that substitute teachers can work to ensure they cannot work more than 29 hours a week. Fewer hours means less money in the teacher’s pay checks and more disruptions for their students,” Collins said.
She cited a study by the University of California-Berkeley saying that 10 million workers are vulnerable to having their hours cut directly due to the reform law. Along with Sen. Joe Donnelly, D-Ind.,Collins sponsored S. 701, which would change reform’s definition of full-time employee from 30 to 40 hours a week.
Reform will also chill hiring, Collins said on Aug. 3, because employers will avoid new hires that would put them over the 50-worker “large-employer” threshold. Having more than 50 employees defines a company as a large employer that must offer group coverage to workers. Companies that are not ready for that mandate will not make hires that put them above 50 workers, she said.
Government Clarifies Reform’s Play-or-Pay Rules
The year-long delay of the employer mandate will give employers time to figure out the rules, and large and small employers can spend that time studying the new instructional material on health reform, on a website the U.S. government unveiled July 29.
The site compiles information from several government agencies and includes:
- A slide deck on the shared responsibility rules (from the U.S. Small Business Administration) for companies with 50 or more employees, which is mainly about calculating the number of full-time employees. It also covers how to tell if one’s plan offers minimum value, and the rules on when employees can get subsidized coverage on health insurance exchanges (now “Health Insurance Marketplaces”), which exposes large employers to penalties.
- A link to documents explaining key reform provisions for employers with 50 or more employees.
- A link to www.hhs.gov/healthcare’s consumer material on reform implementation.
- An explanation on whether and how a business needs to calculate employer shared responsibility penalties.