Republicans campaigned on repealing or amending Obamacare and have started by picking on the employer mandate. They will quickly learn it’s not so easy. This law is so complicated, so interconnected with so many parts tinkering may not be all that easy. Here is one example. Every time you do something to benefit the private sector you drive more people to taxpayer supported programs. The Republican argument that employers will cut hours or jobs to avoid health insurance costs is questionable. If there is work to be done and workers needed they won’t do that.
Here is what the New York Times says:
By adjusting that threshold to 40 hours, Republicans — strongly backed by a number of business groups — said that they would re-establish the traditional 40-hour workweek and prevent businesses cutting costs from radically trimming worker hours to avoid mandatory insurance coverage. They contend that the most vulnerable workers are low-skilled and underpaid, working 30 to 35 hours a week, and now facing cuts to 29 hours so their employers do not have to insure them.
What you have here is not solving a problem, it’s merely cost-shifting once gain. This time from employers to the taxpayer.
The idea that this move is going to increase the number of uninsured is also curious given Americans are required to carry insurance. The CBO predicts as many as 500,000 newly uninsured. How can that be given these relatively low income folks can probably get insurance through an exchange plan and likely at less cost than their employer coverage if they are not eligible for Medicaid?
Do any parts of this puzzle fit?
H.R. 30, Save American Workers Act of 2015
Read this from the Congressional Budget Office
As introduced in the House of Representatives on January 6, 2015
H.R. 30 would change how penalties are imposed under the Affordable Care Act (ACA) on employers that do not offer insurance (or offer insurance that does not meet certain criteria) and that have at least one full-time employee receiving a subsidy through a health insurance exchange. The legislation would raise the threshold that defines full-time employment from 30 hours per week under current law to 40 hours per week, and it would apply that higher threshold in two ways in the calculation of penalties.
As a result, H.R. 30 would reduce the number of employers that are assessed penalties and lower the penalties assessed against some employers, which would decrease the amount of penalties collected.
Because of the changes in who would pay penalties and the amounts they would pay, CBO and the staff of the Joint Committee on Taxation (JCT) estimate that enacting H.R. 30 would also change the sources of health insurance coverage for some people, and those changes would have further budgetary effects. Specifically, in years after 2015, CBO and JCT estimate that the legislation would:
🔴 Reduce the number of people receiving employment-based coverage—by about 1 million people;
🔴 Increase the number of people obtaining coverage through Medicaid, the Children’s Health Insurance Program (CHIP), or health insurance exchanges—by between 500,000 and 1 million people; and
🔴 Increase the number of uninsured—by less than 500,000 people.
As a consequence of the changes in penalties and in people’s sources of insurance coverage, CBO and JCT estimate that enacting H.R. 30 would increase budget deficits by $18.1 billion over the 2015-2020 period and by $53.2 billion over the 2015-2025 period. The 2015-2025 total is the net of $66.4 billion in additional on-budget costs and $13.2 billion in off-budget savings (the latter attributable to increased revenues). Although enacting H.R. 30 would affect direct spending and revenues, the provisions of the Statutory Pay-As-You-Go Act of 2010 do not apply to the legislation because it includes a provision that would direct the Office of Management and Budget to exclude the estimated changes in direct spending and revenues from the scorecards used to enforce the pay-as-you-go rules.
via H.R. 30, Save American Workers Act of 2015 | Congressional Budget Office.
QUINNSCOMMENTARY 
They missed the opportunity to reach across the aisle and get something done. The R’s say they want to return to the status-quo ante on who is a “full time” employee – leaving the new PPACA individual and employer shared responsibility rules/penalty taxes in place. The D’s argue that changing to 40 from 30 (where employer penalty taxes apply) will expose millions more to a reduction in hours – leaving those working 39 hours a week without employer-sponsored coverage and no employer penalty tax, while increasing the deficit as millions more qualify for taxpayer financial support when enrolling in public exchange coverage.
Simply, negotiate, split the difference. Change the rules where the employer penalty tax applies to those working 35 or more hours a week (comparable to the self-insured health plan non-discrimination rules that have been in place since 1981), but, to minimize the cost to Treasury, treat someone working 30 – 39 hours a week as ineligible for taxpayer financial support for public exchange coverage.
Those who do not have access to coverage through a spouse’s employer’s plan, a parent’s plan, Medicaid, etc., would be that much less likely to accept a position offering only 30 – 39 hours a week where it does not come with an offer of health coverage.
Finally, John Goodman, in a WSJ article of the last few days, confirmed how employers have restructured their coverage so that the 30 hour rule has no impact – well no impact on the employer other than reducing their enrollment in medical coverage and the employer cost. This occurs when the employer puts in place a bare Minimum Value Plan (bMVP). A bMVP includes:
– Raising in-network PPO coverage deductibles to $6,600/$13,200 (so not eligible to contribute to a Health Savings Account),
– Exclude targeted individuals from participation in the cafeteria plan’s tax preferred contributions,
– Massively increase deductibles out of network,
– Charge 9.5% of pay (or whatever is the highest of the three IRS-provided safe harbors) for single tier coverage, and
– Charge 100% of the cost of coverage (or more) where the worker elects to cover even a single dependent.
So, for someone who has household income of say $20,000, and is single, they would end up contributing about $160 a month after tax, more than 10% of their wages, much more than a 10% reduction in take home pay, for a plan with a $6,600 deductible. And, for a couple with household income of say $40,000, you could charge anything in the way of contributions for a plan with a $13,200 deductible. Since the goal of changing full time is to minimize enrollment of those working 30 – 39 hours a week, this bMVP option turns out to be a worse offer than no coverage offer at all (as an offer of “qualifying coverage” means the worker is not eligible for taxpayer financial support should they enroll in public exchange options).
In Mr. Goodman’s example, they depict an employer who offered bMVP coverage to 200, but only 1 enrolled – so fewer were enrolled when compared to pre-PPACA enrollment.
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Very interesting. I missed that Goodman piece.
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