The “Save American Workers Act” Would Do Exactly the Opposite

The New Year brings renewed focus on legislative “fixes” to the Affordable Care Act (ACA).  Unfortunately, the bill that the Republican leaders have prioritized – which they are calling the “Save American Workers Act” – will actually reduce employment, not increase it.

The misnamed bill, which is H.R. 30 and was just introduced this week (and might be voted on by the House today), would change the definition of “full-time” work that is part of the employer mandate section of the ACA. The proposal to increase the threshold for full-time employment from 30 hours a week to 40 hours a week would significantly affect the number of employers impacted by the mandate, which requires all companies with 50 or more “full-time” workers to provide health insurance or face financial penalties. Although the bill’s proponents contend that the change would protect workers’ wages and the sanctity of the 40-hour work week, experts at the Congressional Budget Office and elsewhere expect exactly the opposite effect.

According to a recent blog post from the Center on Budget and Policy Priorities (CBPP), there are a number of compelling reasons why the bill being introduced in the House would hurt workers rather than help them:

• The proposed change would have a very substantial adverse effect because only 7% of employees are working within the 30-34 hour work week range, compared to 44% who work 40 hours a week. A Congressional Budget Office (CBO) analysis concluded that: “because many more workers work 40 hours per week (or slightly more) than work 30 hours per week (or slightly more), [the House bill] could lead employers to make changes that would affect many more workers than will be affected under current law.”
• The changes proposed in the bill would actually cost taxpayers more money because fewer employers and workers would be covered by the employer mandate. This would effectively result in a reduction in the availability of employer-based coverage and push more employees onto Medicaid or into Marketplace insurance plans that will be federally subsidized.   According to the CBO analysis, “enacting H.R. 30 would increase budget deficits by … $53.2 billion over the 2015-2025 period.”
• The CBPP blog post also points out the recent CBO analysis that finds that the bill’s proposed changes would not only reduce the number of people with employer based coverage and increase the number of individuals on Medicaid and CHIP but would also raise the number of uninsured individuals by 500,000.

Instead of focusing on making changes to the ACA that cause more harm to workers and taxpayers, Congress and the President should develop constructive bipartisan solutions that can truly improve coverage the and health of children and their families. Examples include:

• Eliminating the “family glitch,” which is the overly broad exclusion from ACA tax credit eligibility for spouses and children when another family member has access to an “affordable” employer-sponsored insurance plan. That significant problem can be fixed by basing the affordability test on the cost of employer plans that also cover other family members, rather than basing it on the cost of covering the worker alone.
• Ensuring the reauthorization of CHIP funding beyond September 2015. Although the ACA extended the statutory authority for the Children’s Health Insurance Program (CHIP) through federal fiscal year (FFY) 2019, it created a funding cliff for states by only providing appropriations through FFY 2015.  Governor Walker along with numerous other governors have written to Congress expressing their support for extending CHIP funding.

The ACA certainly isn’t perfect, so it’s appropriate that Congress and the President work to make “reforms.”  But it’s incumbent upon voters to insist that the changes improve the law, rather than hurting workers and increasing costs for taxpayers.

Sashi Gregory and Jon Peacock