Water Resources Development Act of 2013
Floor Speech
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Ms. COLLINS. Mr. President, all over America concern has been growing that the implementation of ObamaCare will cause serious damage to our economy and to our health care system. Lost wages, soaring insurance rates, more bureaucracy, and less access to care are just some of the adverse consequences we are beginning to see. There are as many reasons for concern as there are flaws in this ill-advised law.
Today, I wish to focus on just one of these flaws; that is, the Affordable Care Act's definition of a full-time employee. I also will comment on legislation I have introduced to fix this one flaw.
My preference, of course, would be for us to repeal ObamaCare and start all over, taking some good features of the law, such as the feature that allows young people to stay on their parents' health care policy until age 26, some of the provisions having to do with preventive care, and some of the provisions having to do with preexisting conditions.
We should have crafted a bill that focused on lowering health care costs because it is the high cost of health care that is the reason we have millions of Americans who are uninsured. Here we are with a deeply flawed law that is having very serious adverse consequences for the people of our country.
Let me talk further about the issue of the definition of a full-time employee. Under ObamaCare, an employee working just 30 hours a week is defined as full time. That is a definition that is completely out of step with standard employment practices in the United States today.
According to a survey published by the Bureau of Labor Statistics, the average American works 8.8 hours per day, which equates to 44 hours per week. The ObamaCare definition is nearly one-third lower than actual practice; likewise, the ObamaCare definition of full-time employee is one-quarter lower than the 40 hours per week used by the GAO in its study of the budget and staffing required by the IRS to implement this new law.
In that report the GAO described a full-time equivalent employee as the measure of staff hours equal to those of an employee who works the equivalent of 40 hours per week for 52 weeks.
We also know, generally speaking, that employers are required to pay overtime to workers after 40 hours a week. That is another indication that 40 hours a week is the standard definition of a full-time employee. Yet, inconceivably, ObamaCare defines a full-time worker as one who works only 30 hours a week.
The effect of using such a low hourly threshold is to artificially drive up the number of full-time workers for purposes of calculating the Draconian penalties to which employers can be exposed by ObamaCare. These penalties begin at $40,000 for businesses with 50 employees, plus $2,000 for each additional full-time equivalent employee.
Needless to say, these penalties will discourage businesses from growing or adding jobs, particularly for employers who are close to that 50-job trigger. In addition, these penalties create a powerful incentive for employers to cut the hours their employees are allowed to work so they are no longer considered full-time for the purposes of this law.
This is not some hypothetical concern. I have heard from employers in Maine who feel they are going to be forced to stay under the 50-employee threshold, and they are even considering, very reluctantly, cutting the number of hours per week their employees are working. Similar accounts have appeared in the media. For example, last week the Los Angeles Times reported that the city of Long Beach, CA, is limiting most of its 1,600 part-time workers to just 27 hours a week to make sure they do not work over the 30-hour threshold. This is a municipality that is cutting the hours and thus the wages of its workers simply because of the requirements of ObamaCare.
According to this news story, the parent company for the Red Lobster and Olive Garden restaurant chains is limiting the hours of some of their employees for the same reason.
I would ask unanimous consent that the Los Angeles Times article entitled "Part-timers to lose pay amid health act's new math'' be printed in the Record immediately following my remarks.
Bringing it closer to home, one Maine business I know has 47 employees. It is doing pretty well and would like to create more jobs and hire more employees, but it simply will not because of the onerous penalties it would incur once it gets to 50 employees. If more businesses follow suit, millions of American workers could find their hours and their earnings cut back, with jobs lost to them at a time when our country is still struggling with an unacceptably high rate of unemployment.
A study just published by the Labor Center at the University of California, Berkeley, underscores the danger. That study, which examined the hours worked in businesses with 100 or more employees, found that 6.4 million workers in these firms worked between 30 and 36 hours per week and another 3.6 million workers have variable work schedules that make them vulnerable to having their hours cut as a direct result of ObamaCare.
The study identified 2.3 million workers as being at the greatest risk. Not surprisingly, these are workers who are employed in the retail trade, nursing homes, restaurants, and hotels. These are some of the most vulnerable workers.
Mr. President, I ask unanimous consent to have printed in the Record the study I just referred to immediately following my remarks.
Let me cite an actual example from my State of Maine.
Peter Daigle, who runs Lafayette Hotels, the largest hotel chain in the State of Maine, has told me that many of his 800 employees work between 30 and 40 hours a week, and that, from a financial standpoint, it would make sense for his company to limit their hours to ensure they do not go over the 30-hour threshold. This is an artificial limit that is driven solely by ObamaCare. As Peter puts it:
It concerns us that employers are being put in a position that they would have to cut associates' hours just to meet a Federal regulation.
Believe me, the owners of the Lafayette chain of hotels are civic-minded, good employers, who care deeply about the well-being of their employees.
During the consideration of the budget resolution, the Senate adopted my amendment calling for legislation setting a more sensible definition of ``full-time'' employee for purposes of ObamaCare penalties. Last month, I introduced a bill to protect Americans who may otherwise find their hours are curtailed and their earnings cut as a result of the unrealistic definition of a full-time employee that is included in ObamaCare. Under my bill, a full-time employee would be an individual who works a 40-hour workweek. That only makes sense. This is a sensible, commonsense definition in keeping with actual practice.
I urge my colleagues to support my legislation, S. 701. It will not solve all of the problems--the many problems--of ObamaCare, but it will help to ensure millions of American workers do not have their hours reduced because of an artificially low, unrealistic definition in the law that is completely inconsistent with actual practice in this country.
There being no objection, the material was ordered to be printed in the Record, as follows:
[From the UC Berkeley Labor Center]
Which workers are most at risk of reduced work hours under the Affordable Care Act?
The Affordable Care Act (ACA) requires employers to provide coverage or pay a penalty based on the number of employees working 30 or more hours per week. This data brief looks at which industries have a high percentage of employees working fewer than or slightly above 30 hours, placing them at risk for reduced hours by an employer wishing to avoid penalties. We also look at the distribution of hours worked by type of health coverage. While the penalty only applies to firms with more than 50 full-time equivalent employees, due to data limitations we show all results for workers in firms with more than 100 total employees. Thus, the tables may slightly understate the number of potentially affected workers.
Table 1 below shows the distribution of hours worked by industry in the United States. From this we see that 6.4 million U.S. workers, 8.9 percent of the workers in firms of 100 or more, work 30 to 36 hours a week. An additional 3.6 million workers report that their ``work hours vary'' and may also be vulnerable to a reduction in work hours. The industries with the highest percentage of employees working slightly over 30 hours are Restaurants, Nursing Homes, Accommodation, Healthcare, Retail Trade, Education and Building Services. The right most columns show the number of workers who are most vulnerable to work reduction, namely, those working 30 to 36 hours, with incomes below 400% of the Federal Poverty Level and not covered by their own employer. The industries with the highest concentration of such workers are Restaurants, Accommodation, Building Services, Nursing Homes and Retail Trade. Retail and Restaurants account for 47 percent of the most vulnerable group. While Healthcare has a higher than average share of employees working between 30 and 36 hours, most in that hours category are in higher income families and/or receive health coverage through their employer.
* Those in the industry working 30-36 hours, below 400% FPL and do not have insurance through their own employer.
Table 2 shows the distribution of worker health coverage by the number of hours worked. While 68.8 percent have insurance through their employer, this only holds for 23.5 percent of employees working fewer than 30 hours a week. For this part-time group, 33.5 percent have insurance through a family member, 10.7 percent have public coverage, 10.3 percent purchase coverage through the individual market and 21.9 percent are uninsured. Slightly more than 50 percent of those working between 30 and 36 hours do not have coverage through their own employer, though only slightly more than one quarter are uninsured or purchase coverage in the individual market. These workers are the most likely to receive subsidized coverage through the Exchanges.
The 2.3 million workers identified as at greatest risk for work hour reduction represent 1.8 percent of the United States workforce. This is consistent with the research on the impact of Hawaii's health care law on work hours. Hawaii requires firms to provide health insurance to employees working 20 hours a week or more, so the cost to employers for full-time workers are much greater in Hawaii than under the ACA, while the hour threshold is lower. Buchmueller, DiNardo and Valetta (2011) found a 1.4 percentage point increase in the share of employees working less than 20 hours a week as a result of the law. In Massachusetts, where the employer penalty is smaller than in the ACA ($295 per year), there was no evidence of a disproportionate shift towards part-time work compared to the rest of the nation.
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[From the Los Angeles Times, May 2, 2013]
Part-timers to Lose Pay Amid Health Act's New Math
(By Chad Terhune)
Some workers are having their hours cut so employers won't have to cover them under Obamacare. But many will benefit from the healthcare law's premium subsidies and Medicaid expansion.
Many part-timers are facing a double whammy from President Obama's Affordable Care Act. The law requires large employers offering health insurance to include part-time employees working 30 hours a week or more. But rather than provide healthcare to more workers, a growing number of employers are cutting back employee hours instead.
The result: Not only will these workers earn less money, but they'll also miss out on health insurance at work.
Consider the city of Long Beach. It is limiting most of its 1,600 part-time employees to fewer than 27 hours a week, on average. City officials say that without cutting payroll hours, new health benefits would cost up to $2 million more next year, and that extra expense would trigger layoffs and cutbacks in city services.
Part-timer Tara Sievers, 43, understands why, but she still thinks it's wrong.
"I understand there are costs to healthcare reform, but it is surely not the intent of the law for employees to lose hours,'' said the outreach coordinator at the El Dorado Nature Center in Long Beach. "It's ridiculous the city is skirting the law.''
Across the nation, hundreds of thousands of other hourly workers may also see smaller paychecks in the coming year because of this response to the federal healthcare law. The law exempts businesses with fewer than 50 full-time workers from this requirement to provide benefits.
But big restaurant chains, retailers and movie theaters are starting to trim employee hours. Even colleges are reducing courses for part-time professors to keep their hours down and avoid paying for their health premiums.
Overall, an estimated 2.3 million workers nationwide, including 240,000 in California, are at risk of losing hours as employers adjust to the new math of workplace benefits, according to research by UC Berkeley. All this comes at a time when part-timers are being hired in greater numbers as U.S. employers look to keep payrolls lean.
One consolation for part-timers is that many of them stand to benefit the most from the healthcare law's federal premium subsidies or an expansion of Medicaid, both starting in January.
The law will require most Americans to buy health insurance or pay a penalty. Yet many lower-income people will qualify for government insurance or be eligible for discounted premiums on private policies.
QUIZ: TEST YOUR HEALTHCARE KNOWLEDGE
``For people losing a few hours each week, that's lost income and it has a real impact,'' said Ken Jacobs, chairman of the UC Berkeley Center for Labor Research and Education. ``But many low-wage, part-time workers will also have some affordable options under the federal law.''
Employers say these cutbacks are necessary given the high cost of providing benefits. The average annual premium for employee-only coverage was $6,540 in California last year. Family coverage topped $16,000 a year. Those premiums have shot up 170% in the past decade, more than five times the rate of inflation in the state.
Bill Dombrowski, chief executive of the California Retailers Assn., said employers are reducing hours because ``it's the only way to survive economically.''
The full effect of these changes in the workplace isn't known yet because many employers are still considering what to do. Many companies waited to see whether the landmark legislation would survive a Supreme Court challenge and the outcome of last fall's presidential election.
Now many employers are scrambling to understand the latest federal rules on implementation and are analyzing what makes the most sense for their workforce and for running their business.
There has been widespread speculation that many businesses would drop health coverage entirely in favor of paying a federal penalty of $2,000 per worker. Benefit consultants and insurance brokers say many companies examined that scenario. But they say most rejected it because of the disruption it would cause for employees and the potential for putting an employer at a competitive disadvantage in luring talented workers.
Instead, pruning the hours of part-timers has attracted far more interest.
"That will be a widespread strategy,'' said Dede Kennedy-Simington, vice president at Polenzani Benefits in Pasadena. ``Employers will be making sure their payroll system can flag when part-time workers are getting close to the cap they set.''
Long Beach officials said they studied the various budget options and opted for a plan that should affect only a small portion of its workforce. The city estimates about 200 part-time workers will be among the most affected by a reduction in hours, representing about 13% of its overall part-time staff. The city calculated that the federal penalty for dropping coverage completely for its 4,100 full-time employees would have been about $8 million.
"We're in the same boat as many employers,'' said Tom Modica, the city's director of government affairs. "We need to maintain the programs and service levels we have now.''
Sievers, the outreach coordinator, has worked on and off for the city since 1994. She agreed that the city has experienced tough fiscal times as many municipalities have since the recession. But the city expects a budget surplus of $3.6 million for the coming year.
"Many part-timers are already struggling to get by in these jobs,'' Sievers said.
Virginia's Republican governor, Bob McDonnell, announced this year that all part-time state employees should work 29 hours or less to avert the 30-hour threshold. Darden Restaurants Inc., which owns the Olive Garden and Red Lobster chains, began shifting to more part-time workers last fall in a much-publicized test to keep a lid on healthcare costs. Then Darden dropped the plan after being roundly criticized.
Some California lawmakers worry that the federal penalties for not providing health coverage aren't enough of a deterrent. They have proposed additional state fines to prevent major retailers, restaurant chains and other employers from restricting hours and dumping more of their workers onto public programs such as Medi-Cal. Opponents say the proposal is unnecessary and could deter companies from adding workers.
Some supporters of the Affordable Care Act say they welcome a gradual shift away from employer-sponsored coverage if new government-run exchanges give consumers a choice of competitively priced health plans. Some low- and middle-income workers who qualify for federal subsidies may end up paying less by buying their own policy next year compared with their contribution toward employer coverage.
"If the exchanges work,'' said Nelson Lichtenstein, a professor of history at UC Santa Barbara and a labor expert, "then I'd be in favor of more people getting covered that way rather than through employers.''
Ms. COLLINS. Mr. President, I yield the floor and I suggest the absence of a quorum.
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