Bill Seeks to Revise Definition of "Full-Time Employee" Under Affordable Care Act

Bipartisan legislation introduced in the Senate on Wednesday would increase the number of hours an employee would need to work to be considered “full-time” under the Affordable Care Act’s (ACA) employer responsibility provisions. Under the healthcare law’s employer responsibility requirements – commonly known as the “pay-or-play” provisions – an employer with 50 or more full-time or full-time equivalent employees will be required to provide health insurance that meets certain ACA standards to at least 95% of their full-time employees starting in 2014, or pay a penalty.

The statute and accompanying regulations currently define “full-time” as working 30 or more hours per week, calculated monthly. The Forty Hours is Full Time Act of 2013 (H.R. 2575, S. 1188) introduced by Sens. Susan Collins (R-ME) and Joe Donnelly (D-IN) would increase this threshold to 40 hours per week. In addition, the bill would increase the number of hours used to calculate a “full-time equivalent” employee to 174 hours per month.

In a press release, Sen. Collins said:

The new health care law creates a perverse incentive for businesses to cut their employees' hours so they are no longer considered 'full time.' 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.

This measure has been referred to the Senate Finance Committee.

Photo credit: MBPHOTO, Inc.

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