CBO Confirms: Raising Health Reform Threshold to 40 Hours Could Affect More Workers

March 3, 2014 at 12:32 pm

The Congressional Budget Office’s (CBO) new cost estimate of the “Save American Workers Act,” which would raise the threshold for full-time work under health reform from 30 to 40 hours a week, supports our contention that the bill could exacerbate the very problem that it’s supposed to solve — that health reform may lead to more part-time work.

Health reform requires employers with at least 50 full-time-equivalent workers to offer health coverage to full-time employees or pay a penalty.  Critics claim the requirement is prompting employers to cut some employees’ hours of work.  As the Wall Street Journal  reports, however, recent data provide scant evidence of such a shift.  And there’s every reason to expect the impact to be small as a share of total employment.

The legislation, which the House Ways and Means Committee recently approved, won’t improve the situation and could make it worse.  “Because many more workers work 40 hours per week (or slightly more) than work 30 hours per week (or slightly more),” CBO writes, “the changes [in the legislation] could affect many more workers than are affected under current laws.”  CBO concludes, “All told, CBO and [the Joint Committee on Taxation] expect that a small percentage of employers would either reassign or reduce hours of employees who work 40 hours per week or slightly more.”

Equally or more important, CBO finds that the legislation would increase budget deficits by $74 billion over ten years and leave more people without health insurance.

That’s not a good deal for American workers and their families.

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More About Paul N. Van de Water

Paul N. Van de Water

Paul N. Van de Water is a Senior Fellow at the Center on Budget and Policy Priorities, where he specializes in Medicare, Social Security, and health coverage issues.

Full bio | Blog Archive | Research archive at CBPP.org

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