Bill Would Make 40 Hours a Week Full Time for ACA Purposes

House Republicans are taking another stab and cutting around the edges of the Affordable Care Act with new legislation that would change the definition of “full-time” workers to individuals who work 40 hours a week, instead of the current 30 hours under the law.

The effort addresses one of the biggest points of contention among employers concerning the ACA, since employers with 50 or more full-time workers must offer them health plans that comply with the law. The legislation, HR 3798, is currently in play in the House of Representatives, although it has yet to be debated in committee.

The bill comes as another measure that would completely eliminate the mandate that all applicable large employers (those with 50 or more full-time employees or the equivalent in part-time workers’ hours) provide health coverage that is affordable and covers the minimum essential benefits as prescribed by the ACA.

What would it do?

Specifically, the bill would:

  • Establish that full-time employee means someone who works 40 hours or more a week.
  • Eliminate penalties for organizations that don’t offer health insurance to staff who work less than 40 hours a week, but more than 30. This would greatly ease the reporting requirements on employers.
  • Suspend the employer mandate for the years 2015 to 2018, in order to suspend any penalties that may have been imposed on employers during that period.
  • Halt the IRS’s current attempts to enforce the mandate and open the door for employers to obtain refunds from the IRS for any penalties already paid.
  • Further delay implementation of the “Cadillac tax.” This is a 40% excise levy that would be applied to premiums over and above a certain maximum premium threshold. The tax has already been delayed a number of times and is scheduled to take effect in 2022.
  • Change ACA reporting requirements. Employers currently must provide IRS Form 1095-B for fully insured group plans to employees who receive ACA-compliant coverage. The bill would only require employers to provide the form to workers that ask for it. That said, employers would still be required to report to the IRS every year.

The outlook

For now, the bill has yet to be debated in committee and with the legislative session drawing to a close in the coming months, it’s unclear if this measure could be passed out of committee and then the House floor in time for it to be debated in the Senate.

It joins the ranks of a few measures that are once taking aim at the ACA.