House passes two bills affecting employer mandate, but veto is expected

January 9, 2015

The U.S. House of Representatives passed two bills this week affecting employer mandate reforms that are part of the Affordable Care Act (ACA), but one is headed for a veto if it clears the U.S. Senate.

The U.S. House of Representatives passed two bills this week affecting employer mandate reforms that are part of the Affordable Care Act (ACA), but one is headed for a veto if it clears the U.S. Senate.

Voting largely along party lines, the House on Thursday passed legislation that would essentially change the definition of the work week under the ACA from the current 30 to 40 hours, by eliminating fees for non-compliant companies.

The vote was 252 to 172, with 12 Democrats joining virtually all Republicans in voting for the measure, which has the backing of the National Retail Federal and the National Restaurant Association.

Under the current law, companies with 50 or more employees have to provide healthcare coverage to full-time employees or face a penalty. To prevent employers from dropping hours to just below the common 40-hour-a-week threshold, the ACA put the definition of full-time at 30 hours a week.

About 7 million workers would be affected if the hours are raised from 30 to 40, according to The Commonwealth Fund. Many would be pushed to the federal marketplace and state exchanges for insurance, and it’s estimated that over 500,000 of them would be eligible for tax subsidies, which would raise government spending.

According to the U.S. Department of Health and Human Services, 87% of all enrollees through healthcare.gov, the federal marketplace exchange, were eligible for a tax subsidy during the first month of the second open enrollment cycle, which began November 15.

The Congressional Budget Office (CBO) has projected that the work-week change will reduce the number of workers currently receiving employer-sponsored health insurance by 1 million, and increase the number of people on federal insurance plans and those buying insurance through the health exchanges by 500,000 to 1 million.

The CBO also estimates that enactment of the bill would increase budget deficits by $25.4 billion from 2015 to 2019 and by $73.7 billion from 2015 through 2024. If the bill is passed by the Senate, which now has a Republican majority, it is sure to draw a veto from President Barack Obama, note observers.

The House also passed a bill this week that exempts veterans who receive insurance through the Department of Veteran’s Affairs or Department of Defense from the employer mandate, according to The Hill. The bill, which passed 412-0, was the first House bill in front of the new Congress. It allows veterans to be excluded from the full-time employee count which will, supporters argue, encourage the hiring of more veterans. It now heads to the Senate, where passage is expected.