House Passes Two Bills Affecting the Employer Mandate

Last week the U.S. House of Representatives passed two bills affecting the employer mandate under the Patient Protection and Affordable Care Act (ACA) that requires employers with 50 or more employees to provide health insurance to all full-time employees or pay a penalty.

The first bill proposes to change the amount of hours required to classify an employee as "full-time" from 30 hours to 40 hours. The vote in the House was 252 to 172, with 12 Democrats joining virtually all Republicans in voting for the measure.

If the bill passes the Senate and survives a veto by President Obama (which is unlikely), the change would mean that employees working less than 40 hours would not be considered full-time and employers would not be required to offer them coverage. Those employees would be forced into the state and federal exchanges to buy health insurance. Once in the exchanges, those individuals may then be eligible for subsidies, which would increase government spending (the extent of which would be subject to the outcome of King v. Burwell as discussed here). Employees could also face cuts in their hours if the bill goes through.

The Congressional Budget Office (CBO) projected that the change would reduce the number of workers currently receiving employer-sponsored health insurance by 1 million and increase the number of people obtaining coverage through Medicaid, the Children's Health Insurance Program (CHIP), or health insurance exchanges by between 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 $45.7 billion from 2015 through 2024.

The second bill passed by the House, which marks the first ACA related bill of this new Congress, exempts veterans who receive insurance through the Department of Veteran's Affairs or Department of Defense from the employer mandate. Members of the House voted overwhelmingly in favor by 412-0, and it is expected to pass the Senate. The bill allows veterans to be excluded from the full-time employee count, which may lead to an increase in hiring of Veterans.

PLDO will be watching this issue closely and provide updated information as it unfolds, as well as information on other important ACA topics. If you have questions about the ACA or other health care-related issues, please call Attorney Jillian Jagling at 401.824.5100 or email jjagling@pldolaw.com. We welcome your comments, questions and suggestions.

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