A Republican-sponsored “fix” for Obamacare would do more harm than good, an analysis by the nonpartisan Congressional Budget Office (CBO) has concluded.
The Save American Workers Act (H.R. 2575) would change the definition of full-time employment from 30 hours per week to 40 hours per week to reduce the number of employers subject to penalties for not offering any or adequate health insurance for their employees.
Under the Affordable Care Act, companies with 50 or more full-time employees are liable to fines of $2,000 to $3,000 per employee for failing to offer insurance to those workers clocking 30 hours or more a week.
Rep. Todd Young (R-Ind.), the bill’s chief sponsor, said during a legislative markup of the proposed measure earlier this month that the 30-hour provision has placed an estimated 2.6 million hourly workers nationwide at-risk for having their working hours cut to 29 hours a week or less.
“These workers aren’t worried about losing hours because they need something to do to pass the time,” said Young, according to a video recording of his remarks. “These are Americans who depend on those hours to support their families. It isn’t just their hours, but also their wages, that are disappearing. An employee seeing their hours cut from 39 hours to 29 hours will lose an entire week’s paycheck over the course of a month. An employee going from 35 hours to 29 hours is essentially receiving a 17 percent pay cut, courtesy of Obamacare.”
But the CBO report concluded that the GOP “solution” would actually cause more problems: It would raise the deficit, increase the number of uninsured Americans, funnel more people into government insurance programs and affect more persons.
About 1 million fewer people would receive employment-based coverage under this legislation, and between 500,000 and 1 million more people would have to obtain coverage through Medicaid, the Children’s Health Insurance Program (CHIP), or government-run health insurance exchanges, the report predicted.
The number of uninsured Americans would increase by about 50,000 under the proposed revision. H.R. 2575 would also increase budget deficits by $25.4 billion over a five-year period and by $73.7 billion over the 10-year period from 2015-2024.
The report speculated that the proposed revision of the law, if enacted, could prompt some employers to reduce employees’ hours to below 40 hours a week, and, “because many more workers work 40 hours per week (or slightly more) than work 30 hours per week (or slightly more), the changes made by H.R. 2575 could affect many more workers than are affected under current law.”
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