Sens. Susan Collins (R-Maine) and Joe Donnelly (D-Ind.) introduced legislation on Thursday to clearly define “full-time employee” in order to resolve uncertainty surrounding the Patient Protection and Affordable Care Act.
Employers with more than 50 full-time employees at the start of 2014 will be required to provide employees with a basic level of health insurance or potentially face a penalty. The ACA defines a full-time employee as an individual who works an average of at least 30 hours per week.
“The new health care law creates a perverse incentive for businesses to cut their employees’ hours so they are no longer considered ‘full-time,'” Collins said. “If its definition of a full-time worker as someone who works only 30 hours a week is allowed to go into effect, millions of American workers could find their hours, and their earnings, reduced. This simply doesn’t make sense.”
Collins’ and Donnelly’s proposed bill, the Forty Hours is Full Time Act of 2013, would change the definition of “full-time” in the ACA to 40 hours per week and the number of hours counted toward a “full-time equivalent” employee to 174 hours per month.
“Many employers have to make decisions because of this definition, and some have chosen to cut current part-time employees’ hours,” Donnelly said. “This leaves too many Indiana families struggling to make ends meet. I’m pleased to join my friend, Sen. Collins, in introducing both a legislative and administrative approach to addressing this problem.”
Collins and Donnelly also recently urged President Barack Obama to provide transition relief for employers. They co-authored a letter to Obama on Wednesday strongly requesting the administration to work with the employer community to provide transition flexibility beyond January 1, 2014 without the threat of penalty.